(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "Principles of the English law of contract and of agency in its relation to contract"

This is a digital copy of a book that was preserved for generations on library shelves before it was carefully scanned by Google as part of a project 
to make the world's books discoverable online. 

It has survived long enough for the copyright to expire and the book to enter the public domain. A public domain book is one that was never subject 
to copyright or whose legal copyright term has expired. Whether a book is in the public domain may vary country to country. Public domain books 
are our gateways to the past, representing a wealth of history, culture and knowledge that's often difficult to discover. 

Marks, notations and other marginalia present in the original volume will appear in this file - a reminder of this book's long journey from the 
publisher to a library and finally to you. 

Usage guidelines 

Google is proud to partner with libraries to digitize public domain materials and make them widely accessible. Public domain books belong to the 
public and we are merely their custodians. Nevertheless, this work is expensive, so in order to keep providing this resource, we have taken steps to 
prevent abuse by commercial parties, including placing technical restrictions on automated querying. 

We also ask that you: 

+ Make non-commercial use of the files We designed Google Book Search for use by individuals, and we request that you use these files for 
personal, non-commercial purposes. 

+ Refrain from automated querying Do not send automated queries of any sort to Google's system: If you are conducting research on machine 
translation, optical character recognition or other areas where access to a large amount of text is helpful, please contact us. We encourage the 
use of public domain materials for these purposes and may be able to help. 

+ Maintain attribution The Google "watermark" you see on each file is essential for informing people about this project and helping them find 
additional materials through Google Book Search. Please do not remove it. 

+ Keep it legal Whatever your use, remember that you are responsible for ensuring that what you are doing is legal. Do not assume that just 
because we believe a book is in the public domain for users in the United States, that the work is also in the public domain for users in other 
countries. Whether a book is still in copyright varies from country to country, and we can't offer guidance on whether any specific use of 
any specific book is allowed. Please do not assume that a book's appearance in Google Book Search means it can be used in any manner 
anywhere in the world. Copyright infringement liability can be quite severe. 

About Google Book Search 

Google's mission is to organize the world's information and to make it universally accessible and useful. Google Book Search helps readers 
discover the world's books while helping authors and publishers reach new audiences. You can search through the full text of this book on the web 



at |http : //books . google . com/ 



GcoKcJt C.Da>ie*^H 



'8 




School i|\l 



c )C 
AAr 



.< 



^/^i 



I 



>. 



PRINCIPLES 



OF TBB 



ENGLISH LAW OF CONTRACT 



AND OF 



ASENCT IN rrs RELATION TO CONTRACT 



vt 
SIB WILLIAM R. ANSON, Babt., D.O.L. 

OV TBS Dfim TBICPLB, BAMMltmOl-A'T'LAW 

WABonr or all muls ooujmm, oiiois 



SECOND AMERICAN 



FOURTH LONDON EDITION 

■DFTBD AND ANNOTATBD 

JBBOME 0. KNOWLTON, A.B. 

TAMt wa a n amm tm law m «sa 



* ',- CHICAGO 
CiIIiA<2SAN AMD COMPANY 

isar . . •_ 



f 01 ^96 
JUL S3 t942 



Id aaoQVdlv to Ibi Aol cC < 

OATJJLflWAW 4Jn> OQMPAMT, 



• • • \ • • 
•• •• •••• • 

••• ,• ••••• 

• • • • • • •. • • 



EDITOR'S PREFACE. 

Many attempts have been made to inolnde a compreheft 
dwB reyiew of the principles of the law of contract within 
the limits of a single volnma Each author has presented 
the subject under new conditions, and, consequently, has 
not duplicated the work of another to any considerable 
extent The several treatises are! views of the same field, 
taken from different points, so that an object stands out 
prominently in one, which is more or less obscure in an- 
other. All are serviceable in leading us to a complete 
vndeiBtanding of the subject of contract in its entirety. 

Dr. Anson's treatise was written with special reference 
to the needs of the student and made its first appearance 
in 1879. The author's logical and analytical treatment 
of his subject and his clearness and accuracy of statement 
of principles secured for the work the favor of the profea- 
non of both England and America. It has passed into its 
fourth London edition and is used in many of the lead- 
ing law schools of this country. No apology is offered f oi 
presenting a second American edition of so valuable a 
book. 

Two yean^ experience as a teacher, using this work as a 

text-book, has led the editor to believe that sub-headings, 

given due prominence in the text, are more convenient 

for the student and the practitioner than when placed 

in the margin. In all other respects the full text of the 

author is preserved. In the notes such citations of Ameri- 
b 



tw EDnOB'8 PBEFACSVL 

oaa aathoritieB are giyen, in rapport of the text^ ai the 
scope of the work will justify. Points of differenoe be- 
tween the English and American law are discussed, and the 
reader has placed before him the history of many impor- 
tant principles, traced through the courts of both countries. 
Topics of recent development in our jurisprudence are con- 
sidered and a large number of English cases, cited by the 
author, are designated as leading cases and reviewed to the 
extent of showing how far they have been followed or 
criticised by our courts. It is believed that by so doinj 
the advantages of an elementary treatise may be combiner 
with those derived from a study of the leading cases in tb 
law of contracts. 
Anr Abbob, Mioh^ November, 1887. 

JEROME 0. KNOWLTC 



PREFACE TO THE FIRST EDITION. 

Thib book is an attempt to draw saoh an outline of the 
principles of the law of Oontract as may be useful to Btii> 
dents, and, perhaps, convenient to those who are engaged in 
the teaching of law. To some of those who are so engaged 
it IjBiB seemed that there is need of an elementary treatise 
which should deal with the subject of Oontract in its en- 
tirety ; and the existence of such a need is my excuse for 
the production of the present work. 

The main object with which I have set out has been to 
delineate the general principles which gorem the contractual 
relation from its beginning to its end. I hare tried to show 
how a oontract is made, whitt is needed to make it binding, 
what its efFeot is, how its terms are interpreted, and how it 
IS discharged and comes to an end. 

In thus sketching the history of a contract, I hare striven 
to maintain a due proportion in my treatment of the vari- 
MS parts of the subject, and to avoid entering into the d^ 
tail of the special kinds of contract The history and 
itiquities of the subject have, of necessity, been dealt with 
aly so far as was absolutely necessary to explain existing 
des, and I have placed in Appendices what I have to say 
n two matters the treatment of which seemed to be ui^ 
avoidable and yet out of place in any partof amerely gen- 
eral oatline. 
One <A these is the ^contract implied in law,** or quasi- 
The effect of this k«al relation has been tnOj 



Ti PREFACE 

ezplamed by Mr. Leake (part i, o. 1, 8. 8), and it seemed to 
be only necessary to point out the general character of the 
obligation which it creates, and to sketch the histoiy of the 
mode in which, for the convenience of pleading, it figured 
for a while in the outward form of contract. 

The other subject is the special contract of Agency: this 
too I regarded as a matter alien to a general discussion of 
the principles of contract, bat the constant recurrence of 
the relation of Principal and Agent made it needful to give 
a brief outline of the chief rules regarding Agency. 

On one or two points, interesting in themselves, or open 
to discussion, I have dwelt at a length disproportionate per- 
haps to my general plan. The somewhat slender authority 
for some of the often-quoted rales relating to past consider- 
ation, the various effects of innocent misrepresentation, the 
questionable validity of a bare waiver of contractual rights, 
are points to which I have called the attention of the 
reader. The intricate subject of the discharge of contract 
by breach, and its effects, together with the kindred subject 
of conditional and independent promises, would seem to 
need a further analysis than it has yet received in the books 
on Oontraet Conditions are usually dealt with in connec- 
tion with the promise when made, whereas their full effect 
can only be ascertained when they are regarded as affecting 
the promise when broken. 

Another object which I have striven to attain is that of 
inducing the student to refer to the cases cited in illustra- 
tion of the rules laid down, and to form for himself a clear 
notion of the law as it has been expounded from the Bench. 
The law of contract, so far as its general principles go, has 
beoa happily free from legislative interferenoe: it ii the 



TO TECB FIRST EDIIION. irfl 

p ro du tf t of tli6 Tigorons oommon sense of English Judgee: 
and there can hardly be a healthier mental exercise thaa 
to watch the mode in which a judicial mind of a high order 
applies legal principles to complicated gronps of fact 

The student, to whom a text-book is not, as it is to the 
practising barrister, a repository of cases for reference^ baft 
a collection of rules and principles which he desires to learn, 
is too apt to take these upon trust unless the cases from 
which they are drawn are thrust upon his notice. For this 
reason I have avoided the citation of numerous cases, I have 
endeayoured to select such as form the most vivid illustra- 
tions of the rules which I have laid down, and I have placed 
the references to those which I have cited — where I 
thought they would be most conspicuous — in the margin. 
This is my excuse for a departure from the ordinary ar 
rangement of references in foot-notes. 

To the able Treatise of Mr. Pollock and the exhaustive 
digest of Mr. Leake I have made frequent references^ but 
these do not express the extent of my obligations to those 
learned authors. Their books must needs enter largely into 
the composition of such a work as mine professes to be. 

I have also occasionally referred the reader to works of a 
more special character, and in particular to the great work 
of Mr. Benjamin for all points connected with the contract' 
of Sale of Personalty. But for the reason which I stated 
above I have avoided the accumulation of a mass of au- 
thority, and have often run the risk of seeming to dogmatise 
lest a numerous collection of references should disincline 

the student to the process of verification. 

W.B.A. 
OouBfr, Tbb Tmmfsm, 
AklSlt. 



PREFACE TO THE SECOND EDITION. 

Iv the aeoond edition of this book I haTe, beddeB some 
minor additions and oorreotionSy rewrittto the chapter on 
Offer and Aooeptanoe, and the part relating to Agency. 
The first of these changes was made necessary, partly be- 
cause I was dissatisfied with the arrangement of the chapter 
as it stood, partly because some important decisions in the 
last three years have settled the law on points where it had 
been open to question. I have had the advantage of Mr. 
Pollock's comments on these decisions in the third edition 
of his work on Contract 

In dealing with Agency I have thought it well to attempt 
a more thorough treatment of a matter on which, in my 
first edition, I had written briefly, and, I fear, in a some- 
what perfunctoiy way. I have now tried to give the student, 
in an elementary form, a coherent outline of the subject in 
its entirety. 

It is a difficult subject for various reasons. Our legal 
terminology is so defective that there is no convenient 
phrase to indicate the man who contracts with the principal 
through the agent; the words ^^ third party '' are elsewhere 
used for one who is outside the contract altogether, and 
the expression ^ other party " though correct is somewhat 
clumsy and unmanageable. 

Again, there is a reluctance among the authorities on the 
subject to recognise in Bepresentation by means of agency 
a form of Employer's liability, combined with a disposition 
to use the word agency as signifying employment merely, and 



PREFACE TO THE THIRD EDITION. is 

Bot employmeat for the special pnrpoee of representation. 
The eonstant intervention of meroantile nsage to modify the 
liability of an agent acting as sach for an unnamed princi- 
pal, and the fineness of the distinctions drawn in some of 
the recent oases, add to the difficulties of the subject; while 
on some points relating to the determination of the agent's 
authority the law is admitted to be unsettled. 

At any rate, I hope I may hare done something to di- 
minish, for the student, the confusion which overhangs the 
subject; and even the failure of good intentions may be 
uot uninstructive in suggestion or warning. 

The history of the Law of Oontraot has acquired a new 
interest from its treatment in the lectures of Mr. O. W. 
Holmes on the Common Law; but in a work which aims 
at being elementary and practical I have not ventured to 
do more than refer the reader to such portions of Mr. 
Holmes' work as bear directly on the matter with which I 
havetodeaL 

Ik eondusion, I must thank the many legal friends who 

have helped me to correct the errors and improve the 

arraaigement of my first edition. 

W. B. A. 



PREFACE TO THE THIRD EDITION. 

Li preparing this book for a third edition I have found 
that some changes were rendered necessary by the legis- 
lation ef the years 1889 and 1888, by the Married Women's 
Property Aot the Bills of Exchange Act^ and the Bank- 
ruptoy AoL 

T bw^ also dealt more fully with the topio of the 



X PREFACE TO THE FOUBTH KDITIOII. 

mimication of the teims of an Offer, the deoisions on thii 
point haying been recently summarized in the case of Wa^ 
him V. ReymUL I have examined and restated the prinoir 
pleB which support the much abused rule that ** the pay- 
ment of a smaller sum in satisfaction of a larger is not a 
good discharge of a debt;'' and I have re-considered in 
the light of the recently reported cases of BrUaiUh «. BoB&i- 
t&r and MaddUan v. Ald&rsMj some effects of the 4th and 
17th sections of the Statute of Frauds. 

Some other necessary changes and corrections haye been 
made, and I haye tried so to make them as to prevent an 
increase in the bulk of my book, or a departure from its 
character of an elementary text-book. 

Au. Souu CouMsm, 

PREFACE TO THE FOURTH EDITION. 

Thxbb is little that is new in the fourth edition of this 
book, except the references to cases decided in the last 
eighteen months. 

I have however tried to restate the difficulties suggested 
by the case of Dichinmm v. Dodda^ and have worked out at 
greater length the rules relating to the loeui pomitmiiae in 
the case of executory illegal contracts. I have also tried 
to reduce to some accord with the general rules of law 
concerning illegal contracts the cases of Bsad v. And&rstm, 
S&ymawr v. Bridge and Bridget v. Sawige^ but can only 
come to the conclusion that the Courts are not veiy willing 
to support the Legislature in its endeavours to discourage 
wagering or speculaUve contraotSb 

W* JKk Am 

AMM»BauiM OoTinm^ 



TABLE OF CONTMTS. 



PART L 

PLACB OF OONTBACrr DT JUKUPBUDDrGB. 

OatUne of rabject 

▲nalyais of Agreement 

Distiiictioii of Contxact from Agreement • • 

Analyeie of Obligatioii 

Diitinotion of Daty from Obligation . . . • 
Fonne ef OhUgation ••••••,• 



PART IL 

lOBMATIOH OF OOaTBAOlL 
CHAPTER L 

Offer and Acceptanca. 

fc tnweeble to Qaestion and Answer • • • • 11 
Fonne in whksh Oontraot may originate • *• • .12 

L required in aU casei 14 

of offer 10 

ofaooeptanoe ••••••• in 

iln offer 18 

Beqnirmentiin Aoeeptanoe 19 

Offer InoperatiTe till accepted ..20 

Howoffermay lapee otherwise than by rerocatioQ, • • • 21 

Bffeot of Acceptance .22 

Under what drcumstancee may offer be roToked • • • • 26 

iKeMMon o. Doddt considered 28 

OOsr by AdTortisement .•...•••• tl 
I ef Intention as distinct from Offer • • • • SI 



sft OONTEN1& 

CHAFTER n. 

Form and Consideration. 

Form or Oonslderatioii neoeasarj nutfkB in a Talid CoQtnwl • • 86 

Historical ootliiie of the subject 86 

Claaaiflcation of Engliah Oontracti 48 

Formal ContracU, 

ContracU of Record 44 

Ck>ntract under Seal •••••••• 46 

How made ..«••••••* 46 

Its characteristicB 47 

When a Deed is essential to Taliditj of a Ocmtraol • • 61 

ShnpU CcntraeL 

Simple Contracts required to be in writing • • • • 68 

TheStatuteof Frauds— Fourth Section • • • • 64 

Its requirements as to form 66 

The Contracts included under it • • • • 68 

The effect of a breach of its proTisions « • • 68 

SeTenteenth Section • • • 64 

Its requirements as to form 66 

Nature of Contract specified 66 

Effect of a breach of its proTisioos • • • • 67 

Omsldirafiofi. 

Definition of Consideration 68 

Its necessity to the Taliditj of eTery Simple Contraol • • 68 

It need not be adequate to the promise • • • • 70 

In what it may consist 72 

Mutual promises 79 

Contingent or oonditional promises • • ' * • .78 

Forbearance to sue, and Compromise of soil • • • 74 

Bailment 77 

Oonsideration which has been held unreal • • • • 77 

Motive 77 

Impossibility and Vagueness 80 

Ferf ormanoe or promise to perform existing legal du^ • 82 

Apparent exceptions, composition with creditors • • 86 

Promise to perform existing contract • • • • 87 

ShadweU v, ShadweU discussed 88 

Lsgality of Consideration 89 

Executory and executed Consideration • • • • 89 

Past Consideration is no Consideration . . • • 89 
First alleged exception to this rule, Consideration azecuted 

upon request 88 

The role in Lampleigh v. Braithwait disousseil • • • 88 



OONTENTBL ztti 

i^onHderation — oonti nued. 'a*b 
Second alleged exception, Tolantary diflchvgeol legal liabil- 
ity of another person 97 

Tliizd exception, reTival of Promise • # • • ,• 90 



CHAPTER in. 
Capacity of Parties. 

U Political or PtofeMionalStotoa • . 101 

8. Infancy. 

Batiiication at Common Law ••••••• 106 

Under Lord Tenterden's Act .••*••• 106 

Infant's BeUef Act 106 

EfTect of first section of Infant's Belief Aol • • • .109 

Of second section • • • 110 

Necessaries, what they are, and how ascertained . • .111 

Liability of Infant for wrong arising from Contnol • • 119 

Or apart from Contract • • • 118 

8. Corporations. 

Neoessary limits to their capacity to Contnol • • • .118 

Express limitations • • • . 114 

i. Lonatios and Drunken Persons. 

Their Contracts Toidable, not roid •••••• 115 

S. Harried Women, 

Their Contracts T^d as a general role at Common Iaw • • 117 

Exceptions 117 

Harried Women's Property Act, 1888 119 

CHAPTER IV. 

Reality of Consent. 
L MiddkB. 

Of intention as distinct from expression 189 

As to nature of transaction ••.•••_• 188 

As to perscMis with whom the contract is made ... 126 

As to snbject-matter of Contract, generally inoperatHv • • 128 

As to existence of subject-matter 126 

As to identity of subject-matter 180 

As to extent of promise as to subject-matter • • .180 

Effect of Mistake is to avoid Contract 135 

W MUrtpre&entaHon. 

Oifllcalty attending its discussion ..•••• 186 

Misre p r es e ntation as distinguished from Fmad • • • 187 

i Mi s re pre s e ntation is inoperatif • • • « 188 

I il be a tsnn in the oontraol •••«•• 145 



It OONTENTBL 

WABM 

Or oocar m contnciB vberrimae fldei • • • • • 145 
Equitable Tiew of representation diBcaned • .146 

If a term in the contract, it is than a form of diaoharga • • 147 

ContractB u5emmae;ide< 148 

Marine and fire insurance ••••••• 148 

Saleofland 160 

Prospectus inviting purchase of shares • • • .151 

How far suretyship is «il>err»mae>t<M 168 

Expressions of opinion or of commendation svs nol lepnt i D 

tations KB 

Fraud, 

It Ib a false r e p rt a entation ••••••• 164 

It is a representation offaei 166 

Intentionally false, or reckless •••••• 167 

Intended to be acted upon by the person injured • • • 160 

It must actually deceiTO 161 

Its effect, it gives rise to action ex ddieio • • • • 168 
" it makes contract Toidable, witliin limiti • • .168 
Duress. 

Its nature and effect 164 

Undue i^/luence. 

How distinct from F^ud • • • 166 

dicumstances under which it is presumed . • • .166 

Suggested by personal influence ...•«. 166 

Or by the drcumstances and relations of the pa r t t ei • 167 
Its effect; bow different from that of Firaud • • •168 

CHAPTER V. 

Legality of 01:^^1 

Nature of fflegality • • . 171 

CbiUracto In breaMo/5fafiife; effect of penalty ... 178 

Wagering contracts— A wager defined and described • • 178 

History of legislation on the subject 176 

OaniraeU in breach of ruiee of Common Lam, 

Agreements to commit a crime or wrong • # • • 181 

OomiraeU in breaeh of the poliey of tU lata 

Public policy; its general application • . • • • 188 

Agreements tending to injure public serrice • • • 188 

tending to pervert the course of jostloe • • 184 

tending to encourage litigatUm • • • • 186 

oontrary to good morals • • • • • 187 

fai restraint of marriage • • • • • 187 

ImeatraiBtef tade •••••• 188 



OONTENTBb 



JCt 



FAM 

160 
189 
190 



H Bffeolof fflegaUtj 

Where the oontraot is diTiBible • • • • ! 

Where the oontnct is indivisible 

Where direct object is unlawful but intention innocent , . 191 

Where direct object is innocent but intention unlawful . . 199 

Where the unlawful intention is on one side only . , . 195 

Securitiee given for money due on illegal transactioiis • . 195 

Distinction between illegal and void contraoti . • • • 190 

Effect of parties not being in pari clelio^o . . . .199 

Effect of loeiispoeniteiUiae while the contract is executory . 200 

Seed «, Anderson and Seipmmr v. Bridge discussed . . 208 

On the meaning of the terms void, voidable^ unen/arem»tl§ , 904 



PART III. 

THX OPESATIOH OF OONTBAOT* 

CHAFTER L 

The Limits of the Contractual ObUgatioa. 

A eontract only affects the legal relatioDS of the partisi to 11 • 906 

Trust no real exception to this rule • • . . , , 209 

1. Contract cannot impose an obligation on a third party . . 209 

But may impose a du^ 210 

I, Gontract cannot confer rights on a third party . • « .212 

Though expressed so to do by the contracting partiii • • 218 

CELAPTEB IL 
The Assignment of Contract. 

L Assignment I7 act of the partiea 218 

liabilities cannnot be assigned 218 

Bights may be assigned at Gonmion Law only by sabatltnted 

agreement in case of debt 220 

Or by custom of merchants ••••••• 221 

Bights may be assigned in Equity ^221 

But notice must be given to persons liable . • • • • 222 

And the assignment "is subject to equities* • • • • 222 

Bights may be assigned by Statute in certain oases • • • 224 

Kcigotiabaity, its characteristics ...... 225 

IHimtntsd by bills of exchange and proouBsory notsa • • 297 

niMtnited by bilk of lading tB9 



Xfl 00NTEN19L 



H Awdgnimmt by operation of law 281 

ObligatkxiM aaaigned on transfer of intaraBte in laiul • • • ttS 

In the oase of leasehold interesfei 883 

In the oaae of freehold intereati 888 

Obligations how affected by marriage 886 

Obligations assigned by death 886 

ObligatJona assigned by bankruptcy or Uqoidatkm • • • m 



PART rv. 

IBTEBPRETATIOV OF OOHTBAOli 
CHAPTES L 

Bides relating to EvidenoiL 

Pkorlnoes of Court and Jury • • 888 

Diflerenoe in proof of formal and simple contract • • • • 889 

L Proof of document purporting to be a contract • • • • 840 

8. Eridenceas to fact of agreement •••••• 841 

8. Eridence as to terms of contract 848 

Of promise collateral or supplementary 844 

In explanation of terms 846 

Ofusage 848 

Bqaitable miss as to rectification and aroidanoa • • .860 

CHAPTER JL 

Bides relating to Construction. 

Generalmles ^ • • • 868 

Rules as to Time and Penalties 868 

PART V. 

DI80HABOB OF OOSTEAOf. 

Moteinwhlohitmaytakeidaoe Wi 

CHAPTER I. 

Discharge of Contract by Agreements 

1. WaiTer as a mode of discharge ••••••• 868 

Only ^>plicable to executory contracts 869 

And to bills of exchange and promissory notes • • • • 86i> 



OONTENTBL zvfl 

ll SuteUtntsd oontnuslt w^am 
How difPerent from poB^Kmement of rlghti • • • .Ml 

Sabsdtated terms M8 

Bubsdtttted parties M8 

t. Plroyinoiis for diaoharge M8 

(1) Promise sabject to right of rescission in a certain erent • 264 

CQ Conditions subsequent M 

Excepted risks 9M 

Act of God 266 

(B) Pnyrisions making contract determinable at option • • 267 

Form needed for discharge bj agreement 268 

GELAJPTER IL 
Discharge of Contrax^t by Performanoe. 

Performance when a complete discharge 271 

Payment as a discharge 272 

Tendsr as a discharge 274 

CHAPTEB m. 
Discharge of Contract by fireach. * 

Bfeeadi of Oontract always gires a right of action, not always a dis- 
charge 27C 

1. Position of party discharged by Breach 277 

He is exonerated from farther performance . • • . 277 

May sue as upon a contract arising from conduct . . . 277 

Eren if his performance be only partial — a quantum memU 278 
a Formsof Discharge by Breach: 

Renunciation before performance is due .... 280 
Impossibility created by one party before performance Is due 288 
Renunciation in the course of performance .... 284 
Impossibility created by one party in the course of perform- 
ance 283 

Failure of performance, when a discharge • • • . 286 

Independent promises of three kinds 287 

(1) Absolute promises 288 

(2) Pronuses admitting of more or lees complete performance 290 
(8) Subsidiary promises 298 

Gonditional promises — nature of conditions • • • . 295 

(1) Concurrent conditions 298 

(2) Virtual failure of consideration 299 

(8) Conditions precedent 808 

How distinguished from Warranty 806 

Aoqoiescence in breach of a condition turns il into a Wairanly 

n pod facto 806 



OOMTERm 



Batiiolifth«brMohUof«i€MiitUll«m . . . 806 

t. Remedies for BieAch M6 

Damages, roles gOTeming their applioation • • » • 809 

Bpeoifio perfonnanoe, when decreed 818 

By what Ck>urte adminiscered 818 

L Difloharge of Right of Action arising from Breaoh • .814 

^7 00llsentof parties* (1) Release 814 

9) Aooord and 8atisfa<itia« ... 816 

Bjjndgment 818 

Bj lapse of tima 818 

CHAPTER IV. 
Discharge of Contract by Impossibility of Perlbnna&oe. 

Phssesof Impossihilitjof Performanoe . • . • • • 880 
nUU V. Svghrtie and Clifford v. Watts . • . . • .880 
Subsequent Impossibility as a rule is no discharge • • • .881 

Unleas it be created by law of England 888 

Or by destraction of a thing the continued aiistanoe of which h 

contemplated 888 

Or by inoapacHy for personal service •••••. 884 

CHAPTER y. 

Discharge of Contract by Operation of Law. 

Herger 888 

Alteration of a written instrument 887 

Bankruptcy ••••888 

PART VI. 

▲OBNOr. 

Its position in Roman Law • • • • • 888 

It now springs from contract of employment . • • • 880 

Outline of subject 881 

CHAPTER I. 

Mode in which the relation of Principal and Agent 
is Created. 

Oapadty of Parties .838 

How their agreement is expressed 888 

Form of mandate 888 

Power of attorney .••••••••.888 



CX)NTBN1H» MiM 

FA«B 

PhvI MitiMMriij •••••••••• 888 

Aathoffi^ from ooadiiol 884 

" ofneoMitx 885 

* of ntifioation 88S 

CHAPTER n. 
Effect of Relation of Principal and Agent 

Their righto and liabilities inter m: 

DutiM of Principal 889 

" of Agent 889 

Must use diligence 880 

Must niake no profit other than his oommissioii • 844 
Must not take up contract himself • . • .841 

Must not del^^te his authority 848 

Relations of parties where agent contracts for a named principal : 

Agent acting within his powers incurs no liabilitj • • 844 

Kinds of agents and their authority • • • « • 846 

Omcs where agent is personally liable 848 

Effect of agent acting without authority . • • • 848 

Remedies when the agent is not liable on the contnol . 849 
Relations of parties where principal is unnamed : 

Extent of agent's liability 860 

Relations of parties where existence of principal is undisclosed : 

AltematiTC liability of Principal and agent . • • .863 

Principal's right to intervene 862 

Determination of alternative liability 868 

liability of Principal for fraud of agent • • • • 864 

CHAPTER m. 
Determination of agent's authority. 



By agreement 866 

Umito of right to revoke 868 

Read fk Andenon considered 868 

By change of statos 869 

By death ef principal 880 

OONTRACrr AND QUASI OONTRACT. 
fflilQtioal oomiection of the two legal relations • • • • 868 
Logal lelatkMi arising from Judgment . • • .866 

* • >• accounts stated 866 

* n n inoi|0j pijd Ijj plaintiff or defendant • 888 

* • • money received bf drfendant te plaint 

iffs nee . .887 



AUTHOR'S INDEX OF OASBa 



WABJMQ BSma TO Rim FA9HL 



ILdams ▼. Undiell, 33. 
Aldenon v. ICaddison, 04, 07. 
Allen Y. BescouB, 181. 
AUflopp Y. Wheatcroft, 188. 
Anderson y. Pacific Insurance Ca, 

1(». 
Archer y. Hudson, 166. 
Arkwright y. Newbold, 161. 
Armstrong y. Stokes, 848» 851, 868. 
Arundel y. Trevilian, 188. 
AfihburY Carriage Co. ▼. Riche, 114, 

190, 214. 
Asiatic Banking Corp., Ex parte, 

224, 
Atherfold y. Beard, 108. 
Atkins Y. Banwell, 97. 
Atkinson y. Den by, 199. 
Atlee Y. Backhouse, 164. 
Avery y. Bowden, 288. 
Ayerst y. Jenkins, 187, 197. 
Ayiesford (Earl of) y. Morzis, 166, 

169. 
Aiemar t. OweUa, 800, 803. 



Baboock t. Lawson, 168, 205. 
BaUey y. de Crespigny, 822, 828. 
Bailey y. Sweeting, 67, 68. 
Beer y. Foakes, 85. 
Bainbridge y. Firmstone, 71. 
Bannennan y. White, 148, 144. 
Barnes y. Toye, 112. 
Barry y. Croskey, 160. 
Barwick y. English Joint Stock 

Bank, 854. 
Baxter y. Burfleld, 285. 
Bayley y. Homan, 815. 
.Beauchamp (Earl) .y. Winn, 350. 
Beaumont y. Greathead, 809. 
Beaumont y. BeeYe, 187, 197. 
Beckham y. Drake, 848. 



BegMe ▼. Phosphate Sewage Oo^» 

BehnV. Bumen, 189, 147. 380, 396^ 

806, 807. 
Bettini y. Gye, 398, 806. 
Beverley y. Lincoln Oaa ft Ooka 

Co., 278. 
Beynon v. Cook, 169. 
Bickerton v. Burrell, 848. 
Birkmyr v. Darnell, 59. 
Blachford v. Preston, 184. 
Blades v. Free, 861. 
Blair v. Bromley, 818. 
Bloomer v. Bernstein, 393. 
Bloxam y. Sanders, 296, 298L 
Boone v. Evre, 299. 
Borries y. Imperial Ottoman BanlL 

852. 
Boulton Y. Jones, 136. 
Bourne v. Mason, 318. 
Bowen v. Hall, 211. 
Bowman v. Tavlor, 47. 
Boyd Y. ffind, 87. 
Boyd V. Mangles, 224 
Boydell v. Dnimmond, 56, 341« 
Bradford v. Roulston, 95, 96. 
Bradlaugh v. Clarke, 186. 
Bradlaugh v. Newdegate, 186. 
Brandt v. Lawrence, 292. 
Brashford y. Buckinghaiii and 

wife, 117. 
Brayshaw v. Eaton, 113. 
Bret v. J. S. and wife, 78L 
Brice y. Bannister, 325. 
Bridger y. Savage, 194. 
Britain v. Rossiter, 68, 67. 
British and American Telegraph 

Co. Y. Colson, 2a 
British Waffson Co. y. Lea, 319. 
Brittain y. Uoyd, 91. 
Brogden v. Metropolitan Bailwaji 

2,24. 
Brook Y. Hook, 887. 
Brown y. Byrne, 248. 
Brown y. Duncan, 178L 



AtTTHOB'S INDEX OF CASEa 



Brjuxt ▼. Herbert, 88. 

Bargee ▼. Wiokfaem, M4, U^ 847. 

BarMi ▼. Eye, 168. 

Burke ▼. S. E. Rj. Co.. 18. 

Bumard ▼. HaggiB, 111 

BurreU'e CaeeTlM. 

Butler end Baker*! Gaae. 88. 

Buxton ▼. BttBt, 87. 

Byrne ▼• Van Tienhoreii, 80, 88. 

0. 

OahfflT. CSabm,180. 

Oalliflher ▼. Biechoffsheim, 78. 

Oannan ▼. Bryoe, 188» 198. 

Card ▼. Hope, 184. 

CSurtwright t. Gartwright, 188. 

Gasaaboglou t. Oibbe, 848. 

Chamberlain ▼. Williamson, 888. 

Chanter t. Hopkins, 802, 804. 

Chamlej ▼. winstanlej, 859. 

Clay ▼. Yates, 181, 195. 

Clifford ▼. Watts. 81, 804, 821. 

dough ▼. London ft N. W. B. Co., 
188. 

Coles ▼. Trecothick, 78, 160. 

CoUen ▼. Wright, 804, 849, 80a 

Collins ▼. Blantem, 49. 

Conder t. Hall, 128, 128. 

Conflans Quarry Co. y. Parker, 828. 

Cooch y. Goodman, 40. 

Cook y. Oxley, 21. 27. 

Cook y. Wright, 75. 

Cooper y. Pbibbs. 129, 167. 

Cope y. Rowlands, 172. 

Cornish y. Stubbs, 288. 

Cort y. Ambergate Railway Co., 
280,284,285. 

Couturier y. Hastie, 129. 

Coyerdale y. Eastwood, 140. 

Cowan y. Milboum. 196, 190. 

Crouch y. Credit Fonder of Eng- 
land, 228, 229. 

Cumber y. Wane, 88. 

Gundy y; Lindsay, 125, 104, 806. 

Currie y. Misa, 08. 

Cutter y. Powell, 292. 

Cuzon y. Ghadley, 220. 

D. 

Dalby y. Hie Lond. Life A«ar. Co., 

18L 
Daltony. liid. Goun. Railway Co., 

117. 
Darrell y. Tibbitta. 180. 
Itebenham y. M^on, 884, 850. 
De BoMche y. Alt, 848. 



Denton y. O. N. R. Co., 84. 
Dickinson y. Dodds, 28, 80. 
Dickson y. Renter's Telegruh Ox, 

167. 
Dimmock y. Hallett, 158. 
Dixon y. Clarke, 274. 
Dobson y. Espie, 259. 
Doe d. Oamons y. Knight^ 88L 
Donellan y. Read, 02. 
Drake y. Beckham, 280. 
Drew y. Nunn, 800. 
Dunlop y. Higgins, 28. 
Dumford y. Messiter, 208. 
Dutton y. Poole, 7a 

E. 

Earle y. Oliyer, 100. 
Eastland y. Burchell. 885. 
Eastwood y. Kenyon, 79, 99. 101 
Edwards y. Aberayron Insur. 8oa 

185, 241. 
Egerton y. Brownlow, 188. 
Eicholz y. Bannister. 804. 
Elderton y. Emmens, 94. 
Eley y. Positiye Life Assor. Go., 

214. 
Eliason y. Henshaw, 88. 
EUen y. Topp, 808. 
Empress Emgineering Co., In re^ 

215. 
England y. Dayidson, 9L 
England y. Marsden, 807. 
Erskine y. Adeane, 245. 
Evans v. Collins, 158. 
Ezall y. Partridge, 808. 

F. 

Fairlie y. Denton, 220. 

Fairlie y. Fenton, 847. 

Faulkner y. Lowe, 6. 

Featherstone v. Hutchinson, 191. 

Felthouse y. Bindley, 15. 

Ferguson y. Wilson, 118. 

Find on y. Parker, 180. 

Fishar y. Bridges, 190. 

Fishmongers' Co. v. Robertson, 62. 

Fitch y. Jones, 178, 198. 

Fitch y. Sutton, 80. 

Flayell, In re, 216. 

Fleet y. Murton, 847. 861. 

Flight y. Bolland, 812. 

Flight y. Booth, 160. 

Flight y. Reed, 100. 

Ford y. Beech, 252. 

Foster v. Charles, 187. 

Foster y. Dawber, 18, 84, 888. 



AUTHOB'S INDEX OF GASE& 



WMter ▼. JoUt, 248. 
Foslor ▼. MackinnQii, 184 
Foster t. Welto, 184. 
Fowkes T. MftDchester 

A88oa» 268. 
Fowler ▼. Fowler, 250. 
Fro0lT.]&iighl,281,888» 

G. 



GftmoDi Doe d. t. Knight, 28. 
Garrard ▼. Frankel, 184» 185, 260. 
Gtsipel T. Smith, 266. 
Oeryae ▼. Edwarda, 818. 
Oibbe ▼. Quild, 8ia 
Qibeon v. Carruthers, 280. 
aabertT. Sykee, 176, 188. 
Olaholm v. Hayes, 141. 
Olazebrook y. Woodrow, !^. 
Goddard y. O'Brien, 84, 815^ 
Qodsail y. Boidero, 181. * 
Goman y. Salisbury, 269. 
GomperU y. Bartlett, 128, 12a 
Qooa y. Gheesman, 86, 87* 
Goode y. Harrison, 107. 
Goodman y. Chase, 60. 
Goes y. Lord Nugent, 270. 
Graham y. Johnson, 224. 
Grant y. Johnson, 289. 
Grayes y. Legg, 294, 807. 
Gray y. Bfathias, 187. 
Gray y. Pearson, 216. 
Gh-eat Berlin Steamboat Co., 201. 
G^bert-Borg^ y. Nugent, 810. 
Great North. Bail. Co. y. Witham, 

21,7a 
Grisewood y. Blane, 179. 
Gomey y. Behrend, 281. 
Guthing y. Lynn, 19. 

Hadley y. Baxendale, 810. 
Haigh y. Brooks, 71, 25a 
Halifax y. Barker, 96. 
Hall y. Warren, 116. 
Hamilton y. Kendal, 86a 
Hamilton y. Watson, 152. 
Hamlin y. Great North. BaU. Co., 

811. 
Hamden y. Walsh, 202. 
Hancock y. laablache, lia 
fiUmsard y Bohinson, 828. 
Harringtor y. Vict. Graying Dock 

Co., 840. 
Harris's Case, 28. 
Hanris t. G. W. Bailwigr Co., 17. 
Hanii ▼• NickflnoD, 84. 



Harris y. Pepperell, 250. 

Harris y. Bickett, 241. 

Hart y. Alexander, 26a 

Hart y. MUes, 77. 

Hart y. Mills, 14, 00. 

Hartley y. Ponsonby, 8a 

Hartley y. Bice, 187. 

Haryey y. Gibbons, 8L 

Haryey y. Mount, 167. 

Haryey y. Young, 166. 

Hawken y. Bourne, 834 

Hayes y. Warren, 864. 

Head y. Tattersall, 264, 266, 89a 

Henderson y. Steyenson, 17. 

Herman y. Jeuchner, 201. 

Hickman y. Haynes, 261. 

Higgen's Case, 826. 

Higgins y. Senior, 56, 847, 858. 

HiU y. Wilson, 3. 

Hills y. Eyans, 249. 

Hills y. Sughrue, 820, 821. 

Hirschfieid y. London, Brighton 

and South Coast Bailway Co., 

157. 
Hitchcock y. Coker, 188. 
Hoadley y. McLaine, 65 90. 
Hochster y. Deiatour, 28a 
Hoghton y. Hoghton, 16a 
Holmes y. Bell, 826. 
Honck y. Mulier, 292. 
Honeyman y. Marryat, la 
Hopkms y. Logan, 866. 
Home y. MidUand Bailway Co., 

810. 
Horsfall y. Thomas, 161. 
Houidsworth y. City of Glasgow 

Bank, 162. 
Household Fire Ins. Co.'y. Grant. 

23,24. 
Hudson y. Bevett, 47. 
Huguenin y. Bazely, 167. 
Hulie y. Heightman, 279. 
Humble y. Hunter, 218, 850, 858. 
Hunt y. Bate, 93. 
Hunt y. Wimbledon Local Board, 

53. 
Hunter y. Gibbons, 818. 
Hunter y. Walters, 124, 125. 
Huscombe v. Standing, 164. 
Hutton y. Warren, 248. 
Hyde y. Wrench, 20. 



lonidei y. Pacific Insurance 0(x, 

130. 
lonides y. Pender, 14a 
Ireland y. liyingston, 841^ SCI. 



w±tt 



AUTHOR'S INDEX OF GASB& 



Irtina ▼. Wafaon, SSti 
Irring ▼. Y eitch, 86Qi. 



Jackaon ▼. Colegraye, ITft. 
Jackson ▼. Union Marine Ina. Ga. 

ao8. 

Jakeman ▼. Cook, 100. 
Jenkins t. Betham, 840. 
Jennings v. Rundail, 118. 
Jervis ▼. Berridge, 244. 
Johnson ▼. (Jalla*:her, lia 
Johnson v. Royal Mail Bteam 

Packet Co,, 860. 
Johnstone t. MiUing, 28!^ 
Jones Y. Ashburnham, 74. 
Jones V. Edney, 150. 
Jones T. Just, 131, 800. 804. 
Joeling ▼. Kingsford, 301, 



K. 

Kaye t. Dutton, 93, 94. 

Keates t. Lord Cadogan, 155. 

Kelr ▼. Leeman, 185. 

Kekewich ▼. Manning, 106. 812. 

Kelly T. Solari, 185. 

Kelner ▼. Baxter, 214, 836, 848, 

861. 
Kemble ▼. Fanren, 255, 256. 
Kemp T. Findon, 866. 
Kemp ▼. Pryor, 835. 
Kennedy t. Broun, 94, 105. 
Kennedy ▼. Panama Steam Co.. 

123. ' 

Keppel ▼. Bally, 284. . 
Kibble's Case, 110. 
King Y. Oaiett, 259. 
Kirkham y. Marter, 6Ql 



Laing y. Fidgeon, 800. 
Lamare y. Dixon, 146. 
Lampleigh y. Braithwait, 92, 98. 

94, 99. 
Langridge y. Lsyy, 160. 
Law Y. London indisputable Life 

Policy Co., 180. 
Leask y. Scott, 76. 
Le Blanche y. L. & N. W. B. Co., 

Lee Y. Griffin, 67. 
Lee Y. Jones, 152. 
Lee Y. Muggeridge, 100, lOL 
ank Y. Walker, 827. 



Lennard ir. Robinson, Mk 
Lennon y. Napper, 254. 
Leroux y. Brown, 62, 67. 
Lewis Y. Nicholson, 848. 
Lickbarrow y. Mason, 280. 
Lindsay Petroleum Co. ▼. Huo, 

Littleifield Y. Shee, 102. 
Uversidge y. Broadbent, 220, 22L 
UaneU Y R. Co. y. L. A N. W. a 

Co., 816, 817. 
London As8urano4 Co. y. ManaeL 

149. ' 

Lovelock Y. Franklyn, 284. 
Lowe Y. Pears, 187. 
Lumley y. Oye, 210, 211. 
Lumley y. Wagner, 818. 
Lumsden's Case, 107. 
Lynn y. Bruce, 85. 

M 



Macdonald y. Longbottom, 946. 
Mackenzie y. Coulson, 250. 
McKinnell y. Robinson, 198. 
McManus y. Bark, 815. 
McPherson y. Watt, 843. 
Maddick y. Marshall, 846. 
Maddison y. Alderson, 64, 67. 
Makin v. Watkinson, 297. 
Mailalieu v. Hodgson, 181. 
Mallfm Y. May, 49, 188, 252. 
Mangles v. Dixon, 228. 
Mansell v. London Assor. Cq,. 14A. 
Marriott v. Hampton, 867. 
Martin v. FitzOibbon, 119. 
Martin y. Hewson, 202. 
Matthews y. Baxter, 116. 
Mattock Y. Kinglake, 290. 
Mavor y. Pyne, 14, 279. 
Mayor of Kidderminster y. Hard- 
wick, 52. 
Melhado y. Porto Alegre Rafl. Co., 

Meyer y. Drener, 249. 
Minett y. Forester, 859. 
Minshull y. Cakes, 288. 
Mody V. Gregson, 801. 
Mollett Y. Robinson, 248, 848. 
Molten Y. Camroux, 115. 
Morgan y. Birnie, 296. 
Morison y. Thompson, 841. 
Mortimore y. Wrjj;ht, 80. 
Morton v. Lamb, 290, 298. 
Moses V. Macferlan, 864, 867. 

iMountstephen y. Lakeman, 60 
Moxon V. Payne, 170. 
Murray y. Parker, 26a 



AUTH0B19 INDEX OF CASEa 



N. 

HsBh T. Armfltrong, MS. 
National Exchange Co. ▼. Drew, 

New Branswick Raflwaj Co. v. 

Muggeridge, 151. 
New York Bowery Fire biB. Co. t. 

New York Fire Ina. Co., 148, 149. 
New Zealand Co. ▼. Watson, 844. 
Nichol ▼. Godta, 800. 
Nicholaon ▼. Bradfield Union, 53. 
Noble Y. Ward, 269. 
Norden Steam Co. v. Dempeey, 249. 
North British Ins. Co. ▼. lioyd, 

152. 
N. W. RaQ. Co. ▼. Mcliichael, 107. 
Nowlan ▼. Ablett, 267. 
Nugent T. Smith, 266. 

o. 

Ogle ▼. Earl Vane, 262. 
Oldershaw v. King, 76. 
O'MealT V. Wilson, lOt 
Ormrod t. Huth, 15a 
0*BorkeT. Bolingfaroke, 165, 169. 

P. 

Palmer ▼. Temple, 297, 816. 

Paradine t. Jane, 822. 

Parker t. Ibbetson, 267. 

Parker t. S. E. Railway Ca, 17. 

Pattinson v. Luckley, 827, 

Payne ▼. Haine, 247. 

Payne t. Mayor of Brecon, 197. 

Paynter t. Williams, 14, 98. 

Pearoe ▼. Brooks, 187, 193. 

Peek ▼. Gurney, 151, 154, 159, 161. 

Peter T. Compton, 62. 

Philline ▼. Fozall, 152. 

Picara y. Hine, 119. 

Pickering ▼. Busk, 884, 846. 

Pickering y. Ilf racombe Railway, 

190. 
Pigot's Case, 189. 
PiJkington y. Scott, 70. 
Pillans Y. Van Mierop, 41, 69. 
Pinnel*8 Case, 84. 
Planch^ Y. Colbum, 280, 285. 
PolhiU Y. Walter, 188, 159, 850. 
Potts Y. Bell, 181. 
Poulton Y. Lattimore, 801* 
Poussard y. Spiers, 802. 
Powles Y. Innes, 220. 
Preston y. Luck, 20. 
Price Y. Easton, 212. 
Priestley y. Femie, 858b 



Printing Co. y. Sampson, 188. 
Prosser y. Edmonds, 187. 
Protector Loan Co. y. Qrioe, 265. 
Pust V. Dowie, 807. 
Pyke*sCase, 194. 
Pym Y. Campbell, 242, 248. 

R 

Raffles Y. Wichelhaus, 180. 
Ramsgate Hotel Co. y. Monteflor^ 

21. 
Rann y. Hughes, 42, 59, 69. 
Read y. Anderson, 203, 858, 859. 
Reader y. Kingham, 59. 
Redgrave y. Hurd, 146, 159. 
Reese Ri\ sr Mining Co. y. Smith, 

138, 167. 
Reg. Y. Downes, 80. 
Reg. Y. Wilson, lia 
Reuse y. Picksley, 55, 56. 
Reuter y. Sala, 292. 
Reynell y. Sprye, 199, 
Richards y. London, Brighton & a 

C. Railway, 805. 
Richardson y. Williamson, 849. 
Ritchie y. Atkinson, 291, 308. 
Riyer Steamer Co., In re, 319. 
Roberts y. Hardy, 104. 
Robinson y. Davison, 824 
Robinson y. Harman, 809, 81L 
Robinson y. Read, 874. 
Robson A Sharps y. Dnuumond, 

218. 
Roper Y. Johnson, 812. 
RoBcorla y. Thomas, 98. 
Rotherham Alum and Chemical 

Co., In re, 215. 
Rothschild y. Brookman, 842. 
Rousillon y. Rousillon, 188. 
Routiedge ^ Grant, 21. 
Rumbally. Metropolitan Bank, 226 
Ryder y. Wombwell, 111. 

s. 

Sanderson y. Piper, 248L 
Sard y. Rhodes, 278. 
Sayer y. Wagstaflfe, 278, 274, 
Schmaling y. Tomlinson, 21(1. 
Schmalz y. Avery, 851. 
SootsonY. Pegg, 87, 88. 
Scott Y. Avery, 185. 
Scott y. Littledale, 134, 
Seeger v. Dutbie, 141. 
Semple y. Pink, 75. 
Seymour y. Bridge, 208. 
Shadwell v. Shadwell, 8a 
Simpson v. Crippin, 29L 



ETFl 



AUTHOR'S INDEX OF CASB& 



SfmpflOii T. L. ft N. W, & C(K, SIL 

Skeet ▼. Landpaj, 810. 

Siade'8 Cane, 864. 

Slater ▼. Jones, 9t. 

Smart t. Sandars, 860. 

Smith ▼. Hughes, 107, 184, 160. 

Smith T. Kay. 167, 168. 

Smith T. Land ft House Pr op er ty 
Corporation, 16& 

Smith ▼. Mawhood, 170. 

Smith T. Wilson, 240. 

Smout T. Ilbery, 860. 

Snook ▼. Watts, 116. 

South of Ireland Colliery Co. ▼. 
Waddle, 50. 

Southwell Y. Bowditch, 847, 861. 

Spencer's Case, 282. 

SpUler ▼. Paris Skating Rink, 014. 

Sprye t. Porter, 186. 

Stanley t. Jones, 186. 

Startup Y. Macdonald, 074. 

StaYers y. Curlinf?, 805. 

Stewart y. Eddowes, 56. 

Stilk Y. Meyrick, 82. 

Stockport Waterworks Co. y. Pot- 
ter 084. 

Stocks Y. Dohson, 020. 

Street y. Blay, 804. 

Strickland y. Turner, 100, 800. 
. Suffell Y. Bank of England, 807. 

SuUiYan y. Mitcalfe, 161. 



Tarrabochia t. Hickie, 141. 
TaYloe Y. Merchants' Fire Ins. Co., 

Taylor ▼. Best, 104. 
Taylor y. Bowers, 200, 
Taylor y. Brewer. 19. 
Taylor y. Caldwell, 808. 
Taylor Y. Laird, 16, 01. 
Thacker y. Hardy, 170. 
Thomas y. Cadwallader, 080. 
Thomas y. Hayward, 288. 
Thomas y. Thomas, 78, 80. 
Thomson y. DaYenport, 850, 861. 
Thomett y. Haines, 84. 
ThomhiU y. Neats, 262. 
Thornton y. Kempster, 181. 
Thoroughgood's Case, 124. 
Thorpe y. Thorpe, 289. 
Touche Y. Metrop. Warehousing 

Co., 214. 
Townson y. Tickell, 10. 
Traill y. Baring, 146. 
trueman y. Loder, 56, 860. 
Iruman y. Fenton, 100. 
Talk Y. Mozhay, 085. 



Turner ▼. Owen, 88. 
Tweddle t. Atkinson. 78^ ill 

U. 
UdeU T. Atnerton, 864. 

v. 

Vamey ▼. Hickman, 000. 
Veresuela Railway Co. ▼• 
15L 

Wade Y. Simeon, 76, 88. 

Wain Y. Warlters, 67, 71. 

Wake Y. Harrop, 280, 040, 045 

Ward Y. H<5bbs, 154. 

Ware y. Chappell, 088. 

Warlow Y. Harrison, 84. 

Waters y. Tompkins, 810. 

Watkins y. Rymill, 18. 

Watson Y. Swann, 886. 

Watson Y. Turner, 98, 00. 

Waugh Y. Morris, 191. 

Webster y. Cecil, 131, 186, 040, 060. 

Week Y. Tibold. 18. 

Weir Y. Bell, 158. 

Wells Y. Mayor of Kiogvton-apoift- 

Huil, 52. 
Wheelton y. Hardisty, 148. 
White Y. Bluett, 81. 
Whittaker, Ex parte, 156. 
Wigglesworth y. Dallison, 048L 
Wilkinson y. Byers, 85. 
Wilkinson y. CoYerdale, 888. 
Wilkinson y. Johnson, 827. 
Wilkinson y. OliYeva, 94, OS. 
Williams y. Bayley. 186. 
Williams y. Carwardine, 88. 
Williams y. Jones, 45, 865. 
Williams y. Lake, 56. 
Williams y. Moor, 100, 106. 
Williams y. Sorrell, 222. 
Wilson Y. Finch-Hatton, 166. 
Wilson Y. Strugneli, 001. 
Wilson Y. Tumman, 836, 887. 
Wing Y. Mill, 98. 
Withers y. Reynolds, 090. 
Wolverhampton Railway Ob. t. 

London and N. W. RaU. Co., 81& 
Wood Y. Abrey. 166. 
Woolfe Y. Home, 846. 



Xenos ▼. Wickham, 10, 06, 4ll 



Toong Y. Cole, 80L 



BOME ABBREVIATIONS USED IN REFERENOE. 

BEPORTa 

A.ft E. Adolphns and Ellis • Q. B. 1884-1841 

a ft Ad BarnwaU and AdolphuB K. B. 1880-1S84 

a ft Aid BarnwaU and Alderaon K B. 1817-1823 

aft C BarnwaU and CressweU KB. 1822-1880 

aftS Best and Smith Q. B. 1861-1866 

BeaT Beavan RoUs Ck>urt, 1888-1866 

bS|! n". O.V.V!!!! Binfham'BNew C^ \ ^' ^' ^834-1840 

Burr Burrows K. B. 1756-1772 

Oamp^ CampbeU K. B. ft a P. nisi prius, 1807-1818 

C B Common Bench I r< -p io^r iqar 

aR,N.a Common Bench, New Series, f U r. l»40-l»65 

GL ft F Clark and FineUy House of Lords, 1881-1846 

GL ft IC Crompton and Meeson ) ^^ lAft^ioQn 

aM. ftR Crompton, Meeson, and Roeooef isx. 1N54-1W56 

Cok Ben. Coke's Reports Eliz. and James 

Cowp^ Cowper K. R 1774-1778 

C^ Elia. or 1 Cro. . Croke, of the reign of Elizabeth. 
Cra Jac. or 2 Cro. . Croke, of the reign of James. 

D.ft J De Gtox and Jones Ch. App. 1867-1869 

D.F.ftJ. De Gex, Fisher, and Jones " 1869-1862 

0. 11 ft G. De Gex, Macnaghten, and Gordon " 1861-1857 

Dr. ft Sm. Drewry and Smale V. C. Eindersley, 1859-1866 

Dr. ft War. Drury and Warren Chancery, 1841-1848 

ElftB Ellis and Blackburn Q. B. 1852-1858 

&ft£^ EUisandEUis Q. B. 1859-1861 

Gsp. Espinasse K. B. ft C. P. nisi prius, 1793-1806 

Exch. Exchequer 1847-1856 

P. ft F. Foster and Finlason. .Cases at Nisi Prius, 1856-1867 

H.BL Henry Blackstone C. P. 1786-1788 

ILfta Hurlstone and Coltman Ex. 1862-1866 

H. ft N. Hurlstone and Norman Ex. 185&-1862 

BLUa House of Lords Cases 1846-1866 

Ir. C. L. Irish Common Law Reports. 

J. ft H. Johnson and Hemming . .V. C. Page Wood, 1859-1862 

ELft J. Kay and Johnson V. C Page Wood, 1854r 1856 

U J. ExcAi Law Journal, Elxchequer ) 

L.J.Q.B. Law Journal, Queen's Bench V 1828 

U J. Ch.. Law Journal, Chancery ) 

LAW REPORTS. 

U & Q. B. Queen's Bench 

U B. G. P Common Pleas 

U R. b Exchequer 

Bq Equity 5-186* 187» 

Ch I Chancery Appeals [ 



nrriii SOME ABBREVIATIONS USED IN REFERENCED 

Q. B. D Queen's Bench DiTirion.. .1876 

GL p. D Common Pleaa Division ) ^o-. ^oq. 

Ex. D Exchequer Division ^ l^^-lWl 

Ch. D. • Chancery Division ) «g.«. 

App. Oa Houseof Lords and PrivyCouncil Appeal Ou6s f 

Lev Levins K. B. i C. P. 1660-l«9e 

Mad Haddock Vice-Chancellor's Court, 1817-1829 

H. &Q Manning and Granger C. P. 1840-1840. 

M. & S Maule and Selwyn K. B. 181»-1817 

M. & W Meeson and Welsby Ex. 1836-1847 

Mer Merivale Chancery, 1818-18 1 7 

Mod Rep t^'^cSU^'^..^T!".^^..^^^^ 16(H)-1702 

M. & K., Mvlneand Keen Chancery, 1832-1837 

Ph PhiUipe Chancery, 1841-1849 

Q. B. Queen's Bench 1841-1852 

Rep. inCh Reports in Chancery 1625-1688 

Rolle Abr Rolle's Abridgment 

Russ Russell Chancery, 1826-1829 

Sch. & L Schoalee and Lefroy Irish Chancery, 1802-1806 

Sm. L. C Smith's Leading Cases. 

S»r Strange 1727-1784 

'^.R- r'™and*i2^;Re^S^"'[ BL B. n«^1796 

Veitr Ventris KB. 1660-1685 

Vein Vernon Chanceiy, 1680-1718 

Y. ft C Young and Collyer . . . V. C. Knight-Bruce, 1884-1842 

Yelv Yelverton K. a 1601-1613 

TEXT-BOOKS. 

Sav. Syst Savigny, System des heutigen ROmiaoliai Bechls. 

Sav. Obi. * Savigny, Obligationenrecht. 

i>r«iirvr.v i Pollock on the Principles of the English Law of 

*^^"^* \ Contract, Fourth edition, 1881. 

Benjamin on Sale. Second edition, 1873. 

r ^.w^ S Leake's EUementary Digest of the Law of Contract, 

^^^*^ : 1878. 

J. ... Selection of Cases on the Law of Contract, by 0. C 

LAngaeu ..••..... ■ LanirdelL 



Holmes, Com. Law 



Langdell. 

Lectures on the Common Law, by Bir, O, W, 
Holmett (Boston, 1881>. 



INDEX OF CASES CITED 

mr 

AMERICAN EDITO& 



BSma TO STAB FA0M. 



Abbott T. Shepard, 33. 
Abel ▼. Hunsen, 269. 
Abercrombie ▼. Butts, 819. 
Adams t. Adams, 188. 
Adams v. Frye, 827. 
Adams t. McMUlan, 68, Sa 
Adams t. Ryan, 46. 
Adams ▼. Nichols, 822. 
Adams v. O'Gonner, 299. 
^lu^ Life In& Co. v. Nozen, 812. 
Alieam v. Ayers. 2. 
Aiken ▼. BlaisdeU, 172L 
Akin T. Peters, 278. 
Albert V. Ziegler, 260. 
Aldrich ▼. Pnoe, 269. 
Alexander y. Jones, 88S, 
Aliis Y. Billings, 204. 
Allis Y. McLean, 813. 
AUison Y. Chandler, 809. 
Allen Y. Allen. 47. 
Allen Y. Bryson, 80. 
Allen Y. Hartfieid, 156, 299. 
Allen Y. Hammond, 129. 
Allen Y. Hawks, 241. 
Allen Y. Jaoquish, 268. 
Allen Y. Schuhardt, 62. 
Allen Y. Woodward, 93. 
Aller Y. AUer, 49. 
Allshoose Y. Ramsey, 62. 
Alms House Farm y. Smith. 819. 
Am. Ins. Co. y. Stratton, 863. 
Am. Lumber Co. y. Mulcrane, 220. 
Ames Y. Union R. R. Co., 210. 
Amory y. Oilman, 176. 
Amot Y. Pitson & Elmira Coal Co., 
188. 

Anderson Y. Walter, 248. ' 
Andrews y. Dietrich, 163. 
Andrews y. Hoxie, 178. 



Andrews y. Smith, 826. 
Angell Y. McLellan, 111. 
Anglo-California Bank ▼• Amaa, 

116. 
Annan y. Merritt, 68. 
Armitage y. Widoe, 837. 
Armstrong y. McGhee, 2. 
Armour y. Trans. I^ Int. Co., 

148. 
Arnold y. Kinitzger, 188. 
Atkinson y. Allen, 249. 
Atkinson y. Anderson, 816. 
Atlantic Bank y. Harris, 818. 
Atwood Y. Fisk, 186. 
Aulger Y. Clay, 275. 
Aurora y. West, 178. 
Austin Y. Wacks, 254. 
Avery y. Dougherty, 848. 
Avery y. Wilson, 294. 
Averill y. Hedge, 21, 28, 81. 
Ayers v. Chicago, etc R. R. Co., 81 
Ayers y. French, 166. 



B. 

B. A; L. M. R. R Co. y. Unity, 3a 

Babcock y. Hawkins, 86. 

Baboock y. Orbison, 840. 

Bacon y. Bonhara, 169* 

Bacon y. Cobb, 822. 

Bacon y. Lee, 172. 

Bailey y. Bailey, 69. 

Bailey y. Day, 83. 

Bailey y. Richardson, 288L 

Baker y. Corey, 279. 

Baker y. Holt, 19. 

Baker y. Johnson, 828, 

Baker y. Kennett, 108. 

Baker y. McCarthy, 246. 

Baldwin y. Barrows, 134 



EDITOB'S INDEX OF GASES CITED. 



BiJdwin ▼. Bricker, 181* 

Baldwin t. Hian, 60. 

Baldwin ▼. Walker, 881 

Baldj ▼. Sferatlon, 187. 

Ballard ▼. Chen^, 854 

Beltaen ▼. Nioolay, 849. 

Bangor Boom Co. t. Whiting, IIS. 

Bann ▼. Diinn» 184. 

BankT. Green, 868. 

Bank of Columbia t. Hagner, 890. 

Bank of Columbia ▼. Patterson, 51. 

Bank of New Orleans ▼. ICathewa, 

104. 
Bank of N. Am. ▼• Emborj, 884. 
Bank of Rochester t. Jones, 880. 
Bank of U. S. ▼. Danbridge, 5L 
Banorgee ▼. Hovey, 48, 88a 
Baptist Church t. Bigelow, 57. 
Barker ▼. Bucklin, 2^. 
Barkley ▼. Tarrant, 245. 
Barlow ▼. Lambert, 849, 807. 
Barney ▼. Grover, 884. 
Barnes ▼• Ferine, 78. 
Barnard T. Lee, 854. 
Barry ▼. Ryan, 240. 
Barry ▼. I^, 948. 
Barrett ▼. Murphy, 840. 
Barren ▼. VanaeTert, 81. 
Barr ▼. Schroeder, 857. 
Barsolew ▼. Newton, 854. 
Bartholomew t. Jackson, 80, 98. 
Bartlett t. Blaine, 161. 
Bartlett ▼. Raymond, 858. 
Bartlett ▼. Remington, 345. 
Bartlett T.Smith, 179. 
Bartlett t. Tucker, 188, 849. 
Bartlett t. Wheeler, 62. 
Bassett v. Bassett, 284. 
Bassett t. Monte Cristo Hhu Ca, 

115. 
Batterman y. Morford, 81. 
Baudoine ▼. Qrimes, 855. 
Bauget ▼. Monroe, 146. 
Baum y. Du Bois, 888. 
Beach ▼. Endress, 260. 
Beardsley t. Davis, 14. 
Beardeley ▼. Morgan, 884. 
Beal Y. Chase, 188. 
' Beal Y. Hayes, 255. 
Beal Y. McVicker, 184. 
Beal Y. McKieman, 848. 
Seals Y. See, 116. 
Seaman y. Buck, 68. 
Bean y. Burbank, 28. 
Bean y. Pioneer Min. Co., 848. 
Bean y. Valle, 58. 
Seattle y. Hillvard, 240. 
BeaupreY. P. & A. TeL Co., 18. 
B e a b e y. Johnaon, 828. 



Beckwith ▼. CheeYsr, 16. 
Beckwith y. T^bott, 56, 87. 
BedeU y. Bissell, 86. 
Beera ▼• Aultman, Taylor 4b Co.. 

84t 
Seers ▼. Doors, 47. 
Behrens t. McKenaisL 116. 
Beidman Y. Goodale, 888. 
Bell Y. Cunningham, 84flL 
BeU Y. EUis, 156. 
Sell Y. Hoffman, 808. 
Bell Y. Hewitt, 62. 
Bell Y. Quinn, 172. 
Bellows Y. Souls, 75. 
BeUows Y. Sowlee, 58. 
Bennett y. Hill, 815. 
Bennett y. Judson, 159. 
Sent Y. Manning, 102. 
Benton y. Holland, 819. 
Benton y. Pratt, 160, 210. 
Bentwick y. Franklin, 186. 
Bergen y. Udall, 170. 
Bergen y. Williams, 24L 
Berry y. Bacon, 4a 
Berry y. Carter, 185. 
Berry y. Doremus, 63. 
Berry y. Wisdom, 855. 
Berthold y. Reybum, 278. 
Berton y. Mather, 184. 
Best Y. Bunder, 172. 
Best Y. FUnt, 181. 
Bethlehem y. Annis, 824. 
BeYeridge y. Rawson, 886. 
Seymer y. Sonsall, 852, 85a 
Biddle y. Briaaolara, 819. 
Sierbauer y. Worth, 190. 
Bifl;elow y. Stephen, 827. 
SiUings Y. Vanderbeck, 8^ 
Sills Y. Porter, 826. 
Bingham y. Parley, 108. 
Sinney y. Morrill, 845. 
Bird Y. Monroe, 55. 
Bish Y. Van Cannon, 16L 
Bishop Y. Fletcher, 57. 
Bishop Y. Small, 15& 
Bissell Y. M South, ft N. Ind. B 

R. Co.. 115. 
Sixby Y. Dunlap, 210. 
Slack Y. Cord, 50. 
Slack Y. Foljambre, 166. 
Blackburn y. Reilly, 292. 
Slackwell y. WUIard, 104. 
Blair y. Snodgrass, 57. 
Blake y. Cole, 62. 
Blake y. Coleman, 241. 
Slakeney y. Goodale, 62i 
Blanchard y. Trim, 269. 
Slaney v. Hoke, 18. 
Blink Y. Walker, 51. 



BDirOB'S INDEX OF CASES CITED. 



Ws ▼• htmnmoBy 19L 

Block ▼. laham, 384. 

Blood T. Bno6, 2M. 

Bloo4 T. Goodrich, 969. 

Bloomer v. Henderaon, tMb 

Blosaom v. Champion, 88(^ 

Blunt ▼. Walker, 114. 

Board of Edocatioii ▼. Qreanbanm, 

51. 
Boardman t. Cutler, 65ii 
Booock T. Farey, 848. 
Boeie t. Bogie, 48. 
Bohanan t. Pope, 818. 
Bollman v. Burt» 898. 
Bool T. Mix, 106. 
Boody T. UcKinnej, 106w 
Booth T. Powers, 887. 
Booth T. SpuYteu Duyrfl BoUing 

liiU Co., 810. 
Booth T. Robinson, 118. 
Booth Y. Fitzpatrick, 88. 
Boothbr t. Scales, 800. 
Borland ▼. Qnppj, 19. 
Boston A Maine & B. t. Bartlett, 

88. 
Boston loeCo. ▼. Potter, 186b 
BosweU ▼. Bioknell, 864. 
Bourne ▼. Shapleigh, 18L 
Bowen ▼. Davis, 166. 
Bowen ▼. Kurtz, 820. 
Bowker v. Lowcdl, 164i 
Bowen ▼. Tipton, 75. 
Bower t. Blessing, 80. 
Bowen ▼. Thomas, 184 
Bowen ▼. Whittle, 188. 
Boseman ▼. Browning, 105, 818. 
Boyle ▼. OuYBinger, 264. 
Brackett t. Hoyt. 178. 
Brackett ▼. People, 816. 
Bradshaw v. Davis, 85. 
Bradstreet v. Baker. 855, 848. 
Bradley v. King, 298. 
Braman ▼. Brigham, 47. 
Braner v. Wheaton, 19. 
Branham v. Record, 16L 
Bray ▼. Kettell, 848. 
Bream ▼. Dickerson, 288L 
Bredin's Appeal, 191. 
Breed v. GaaL City Bank, 885. 
Brenham t. Ostrander, 815. 
Brewster ▼. Baxter, 845. 
Brewster ▼. Edgerly, 855. 
Brewer v. Cheeeeman, 884. 
Brewer v. Dyer, 812. 
Brewer V. l<anhaU,884. 
Brkk Fkw. Church v. Mayor. 888. 
Brick v. €lamar, 61. 
BrifcdcCo. V. Pond, 189. 
Bridi»T.HiibUtfd,178L 



Bridges T. Stioknev, 816l 

Brigg V. Hilton, 801. 

Brigss V. Lizer, 14, 19. 

Brigham & Co. v. Carlisle, 818. 

Bristol V. Brainwood, 159. 

Bristow V. Lane, 218. 

Brittain v. Daniels, 47. 

Britten V. Ainger, 57. 

Britton V. Philips, 21. 

Britton v. Thornton, 816. 

Britton V. Turner, 394. 

BroadweU v. Gastman, 68. 

Broch V. Barnes, 170. 

Bromley v. Goodrich, 204^ 

Bronson v. Turner, 800. 

Brook V. Filer. 104. 

Brooks V. Hamilton, 137. 

Brooks V. Martin, 199. 

Brooks V. White, 88. 

Brown Chem. Co. v. Atkinson, 848. 

Brown v. Bennett, 100. 

Brown v. Brown, 204. 

Brown v. Everhardt, 269. 

Brown v. Foster, 249. 

Brown v. Einsie, 187. 

Brown v. N. Y. C. R. R., 8. 

Brown v. Olmsted, 273. 

Brown v. Wigwins, 846. 

Brownwell v. Harsh, 74. 

Browning v. Home Ins. Co., 148. 

Browning v. Krause, 815. 

Bruce v. Bishop, 19. 

Brumby ▼. Smith, 884. 

Brunswick & Balke Ca v. Martin, 

299. 
Brush T. Sweet, 224. 
Bryan v. Hunt, 269. 
Bryant v. Booze, 24. 
Bryant ▼. Isburg, 800. 
Buckingham v. Ludlum, 79. 
Buckingham v. Osborn, 800. 
Buckley v. Beardsly, 57. 
Buckley v. Buckley, 309. 
Buckman v. Bergholz, 178. 
BueU V. Miller, 268. 
Buffalo Barb Wire Co. v. PhUlip. 

310. 
Buffendeen v. Brooks, 196. 841. 
Bugbee v. Eendricken, 59. 
BttU V. Bull, 85. 
Bull V. Harrigan, 172. 
Bullock V. Adams, 254. 
Bungee ▼. Eoop, 281. 
Bunn ▼. WiDthrop, 167. 
Burger v. Rice, 224. 
Burges v. Carpenter, 210. 
Burke ▼. Adams, 46. 
Burke ▼. Miller, 84a 
Boms ▼. Soott, 186» 841 



EDrrOB*S INDEX OF GASES dTEXX 



Bunihain t. KidweU, lift. 

Barnett ▼. Burnett, 4A. 

Burritt ▼. Saratoga FSra Ina. Oo., 

148. 
Bortia ▼• Thompaon, 881. 
Burton t. Leroy, 46. 
Burton ▼. Harahall, 81& 
Burton ▼. Shannon, 44. 
Burton ▼. Shotwell, 2Xk 
Bnah ▼. Lathrop, 222, 224. 
Buah T. Linthicum, 107. 
Buah ▼. Byrne, 224. 
Butterfidd ▼. Hartahom, S20L 
Button Y. Ruaaell, 808. 
Butier'a Appeal, 184. 
Butler ▼. Duncan, 189. 
Bjard ▼. McLean, 188. 
Byard ▼. Shink, 278. 
Byeriee ▼. Wendell, 224. 
Bjen ▼. Chapin, 181, 80a 
Byrd ▼. Bertrand, 282. 

0. 

Cabe ▼• Jamison, 268. 
Cabot ▼. ChriBtie, 162. 
Gadena ▼. Teaadale, 220. 
Caesar t. Karutz, 156. 
CagneT ▼. Cuson, 166. 
CaBen v. Piatt, 292. 
Cahill V. Bigelow, 66. 
Caldwell ▼. Henry, 162. 
Caldwell ▼. Lawrence, 266. 
CaldweU t. Meek, 242. 
Calkins ▼. Frey, 116. 
Callan ▼. McDaniel, 282. 
Callanan ▼. Edwards, 224. 
Cammeyer ▼. United German 

Churches, 19. 
Campbell ▼. Long, 818. 
Camobell t. New Eng. Ina. Go., 

Campbell t. Perkins, 11& 
Campbell t. Stakes, 118. 
Cauda y. Wick, 281. 
Gaual Co. y. Railroad Co., 9. 
Canal Co. y. Ray, 268. 
Gannon y. E^neipe, 218. 
Carej y. MiUer, 124. 
Carbsle y. Campbell, 68, 60. 
Carmen y. Pultz, 276. 
Carmet y. Kitchen, 172. 
Camigie y. Morrison, 212. 
Carpenter y. Galloway, 269. 
Garr y. Daley, 246. 
Garr y. DuYal, 20. 
Garrier y. Cameron, 229. 
Oanon y. dark, 98. 



Garter y. Dickson, 1(A 
Garter y. Nichols, 224 
Case ▼. Boughton, 49. 
Case Y. dough, 106. 
Case Y. Sears, 278. 
Gatchings y. Hacke, 8001 
Catea y. Batee, 71. 
Gathcart y. Robinson, 791 
Gatlin y. Tobias, 292. 
Gaton Y. Shaw, 16. 



Cecil Y. Spurger, 184. 
■ Ohi ~ 
188. 



Central Ohio Salt Co. y. Outhri^ 



Chamber of Com. y. SoUitt, 28>, 
Chambers y. Seay, 85a 
Chamberlain y. Bellera, 889. 
Champlin y. Parish, 68. 
Gharapton y. Rowler, 2S(4. 
Chaffee y. Tliomas, 93. 
Chalfant y. Payton, 187. 
Challoner y. Bouck, 838. 
Chandler y. Sanger, 164. 
Chandler y. Sprague, 230. 
Chapin y. Longworth, 224 
Chapman y. Deere, 90. 
Chapman y. McGraw, 268. 
Chapman y. Rose, 124 
Chappell Y. Brockway, 188L 
Charles y. Scott, 48. 
Chase y. Fitz, 236. 
Chase y. Paltberg, 844 
Chesapeake ft Ohio Oanal y. 

Knapp, 276. 
Chesterfield y. Sanson, 169i 
Chestnut Hill Turnpike y. Butter, 

61. 
Cheney y. Cook, 28. 
Chicago ft A. R. R. Go. ▼. N. Y. Li 

K&W. RCo., 818. 
Chicago, etc. R. R. Co. Y. Danc^ 

18, 21, 73. 
Chicago Dock Go. y. Kinzie^ 6S. 
ChUd Y. Dobbins, 106. 
Christian College y. Hendley, TiL 
Christian Churdi y. Johnson, 114 
Chrisman y. Hodges, 262. 
Christie y. Craig, 86. 
Chrysler y. Canady, 166. 
Church Y. Florence, 262. 
Clark Y. Baker, 294. 
dark Y. Bank of Wheeling, 84a 
Clark Y. Carroll, 224 
Clark Y. Dales, 19. 
Clark Y. Gilbert, 826. 
dark Y. Herring, 80. 
Clark Y. Martin, 286. 
dark Y. Manuf . Ins. Co., 14^ 
dark Y. Moody, 840. 
dark Y. Moray, 104 



EDITOB'S INDEX OF GASES CITED. 



Chrk T. Ftoidleton, 6t. 
Clark T. Ricker, 191. 
Clark T. Thayer, 229. 
Ctark Y. Tombull, 70. 
Oaj T. Recketts, 20. 
Qements' Appeal, 181. 
Clement ▼. Cash, 255. 
Clement ▼. Meserole, 285. 
Clem Y. New Castle, etc., 157. 
CleYeland y. Bnmham, 245. 
deYeland & Ifahoning R. R. Ca y. 

Himrod Famace Co., 115. 
deYeland y. Sterrett, 274. 
dine Y. Guthrie, 124. 
dodfelt Y. Cox, 222. 
Cobb Y. Cowdrej, 191. 
Cobb Y. E:napp, 852, 558. 
Cochran y. Stewart, 168. 
Cocke Y. Barker, 47. 
Cockrell y. Thompson, 179. 
Coffin Y. Tallman, 288. 
Cohen y. N. Y. Mut. life, 104. 
CoU Y. Wallace, 811. 
Colby Y. Dearborn, 241. 
Cole Y. Cassidy, 159. 
Cole Y. Hughes, 284. 
Cole Y. Sackett, 263. 
Cole Y. Singerly, 62. 
Cole Y. WeUs, 254. 
Coleman y. Eyer, 65. 
Coleman y. first Nat Bank, 868. 
Coleman y. Hart, 48. 
Collins Y. Delaporte, 285. 
Collins Y. Rainey, 841. 
Collins Y. Swan, 836. 
Collins Y. Tilton, 840. 
Collins Y. Westberry, 164. 
Combs Y. Scott, 835. 
Commercial Baink y. Norton; 848. 
Commissioners y. Rhoades, 18. 
Com. of Knox Co. y. McComb, 

181. 
CommisaionerB y. Smith, 818. 
Commonwealth y. Dupuy, 186. 
Commonwealth y. Hide & Leather 

Ins. Co., 14a 
Compton Y. liarstin, 62. 
Comstock Y. Adams, 188. 
Comstock Y. Smith, 98. 
Condict Y. Flower, 827. 
Condnitt y. Roes, 284. 
Conley y. Windsor, 229. 
Connelly y. De Voe, 82. 
ConoYer y. Stillwell, 6a 
Conway y. Sweeney, 72, 
Conrad Y. Schwaub^ 72. 
Cook Y. Bell, 224. 
Cook Y. Bradley, 80. 
CookY. Brown, 46. 



Cooke Y. Millard, 66. 
Cook Y. Murphy, 268. 
Cooper Y. LoYenng, 15a 
Corby y. Weddle, 124. 
Cornell y. Cornell, 825. 
Coming y. Abbott, 172. 
Comwells y. Krengel, 20, 
Corwin y. Collett, 826. 
Corwin y. Patch, 249. 
CoegroYe y. Bennett, 800. 
Coster Y. Mayor of Albany, tUL 
Cotheal y. Talmage, 255. 
Couch Y. Ingersoll, 290. 
Courtwright y. Barnes, 18a 
CoYentry y. Barton, 889. 
Cowing Y. Green, 840. 
Cox Y. Davis, 240. 
Cox Y. Higby, 159. 
Coynes y. Lynde, 8a 
Crabill y. Marsh, 64. 
Crabtree y. Messersmith, 281, 884 
Craft Y. McConoughy, 188. 
Craig Y, Harper, 73. 
Crans y. Hunter, 75, 101. 
Crawford y. Chapman, 28a 
Crawford y. Russell, 188. 
Crawford y. Millspaugh, 26a 
CraYzer y. Taylor, 249. 
Crehore y. Crehore, 161. 
Crenshaw y. Slye, 801. 
Cresby y. Fitch, 267. 
Crist Y. Armour, 281, 884. 
Critcher y. HoUoway, 192. 
Crockett y. Scribner, 6a 
Cromwell y. Tate, 46. 
Cronshore y. Knox, 819. 
Crook Y. Cowan, 14. 
Croucher y. Clatman, 80a 
Cuff Y. Penn, 269. 
Culler Y. Welsch, 192. 
Culling Y. Grand Trunk R. Co., 8ia 
Culver Y. Bunning, 7a 
Cumberland R'y Co. v. Babb, 181 
Cummings v. Ajmold, 269. 
Cunningham v. Nat Bk. of An- 

gusto, 178, 17a 
Curnaham y. Bailev, 15a 
Curran v. Downs, 19a 
Curry Y. Larer, 255. 
Curtis Y. Leavitt, 199. 
Curtz Y. Gokey, 188. 
Cuthrell y. Cuthrell, 24a 

D. 

D. & H. Canal Co. y. Pa. Goal Oft., 

185. 
Dale Y. Dale^ 16a 



EDITOB'S DIDEZ OF OASES GUBIX 



DaljT.8iBHh.81S. 
Dana ▼. Coomba, 100. 
Dana ▼. Hancock, 969. 
Danfoith ▼• Scfaohaiia TnrnSb Oow, 
.61,114. 

Danfoith ▼. Strietar, 181 
Daniel t. Brown, 866. 
Daniels ▼. Hdlenbeck, 80w 
Daniels t. Newton, 881. 
Danolda t. State, 104. 
Danaon t. Ford, 74. 
Darly t. litchfield, 866. 
Darrow t. St. George, 866. 
DaTid Y. EUioe. 863. 
Davidson ▼. Nichols, 16L 
Davis ▼. Bartlett, 888. 
Davis V. Bauer, 887. 
Davis V. Dudley, 106, 106w 
Davis V. Higgins, 84a 
Davis V. Lane, 860. 
Davis V. Meeker, 166. 
Davis V. Shields, 68. 
Davis V. Williams, 46. 
Davis V. Windsor Bank, 860. 
Davison v. Von lingen, 141, 806. 
Dawson v. Hall, 47. 
Day V. Pool, 801. 
Dayton v. Fargo, 894i 
Dean v. BaaseU, 836. 
Dean v. Emerson, 188, 180. 
Dean v. Yates, 161. 
Dearborn v. Bowman, 89, 88. 
Dearborn v. Clark, 890. 
Dearborn v. Cross, 968. 
Dearborn v. Turner, 964. 
De Camp v. Hanna, 194 
Decan v. Shipper, 168. 
Decosta v. Davis, 69. 
De Qroot v. Van Deusen, 188. 
Dehan v. Fosdick, 90. 
De Jamett v. De Oiverville, lOi. 
Delacroix v. Buckley, 968. 
Delamater v. Miller, 984. 
Demarest v. WUlard, 939. 
Dennis ▼. Maxfield, 319, 
Dennis v. Noble, 90. 
Denny ▼. Williams, 69. 
Dent V. Steamship Co., 14. 
Denton v. Atchison, 904. 
Denver & N. O. Const Ca ▼. Stoat, 

186. 
Derby v. Johnson, 986. 
Derby v. Phelps, 61. 
Derlin v. Mayor, etc., 894. 
Dermot v. Jones, 90, 978, 808, 899. 
Derrick v. Mormette, 90. 
Detroit v. Mutual Oas Co., 116. 
Detwiller v. Bish, 194. 
Devlin v. CbambUn, 878. 



Devol T. MclBtoah, 811. 

Dewey ▼. Toong, 68. 

De Witt V. Root, 68. 

De Witt V. Walton, 868. 

Dexter v. Campbell, 888. 

Dexter v. HaU, 116. 

Dexter v. Norton, 894 

Dey V. Dox, 988. 

Diamond Match Oow ▼. IbMber, 

188. 
Dickinson v. Qay, 949. 
Dillon V. Allen, 179. 
Dingley v. Oler, 981. 
Dobbin v. Cruger, 47. 
Dodge V. Council Bluffs, 116. 
Dodge V. Emerson, 973. 
Dodge V. Hopkins, 333. 
Dodger v. Nichols, 166. 
Doe V. Bumham, 179, 
Doe V. Thompson, 34a 
Donaldson v. Farwell, 166. 
Donaldson v. Polk, 939. 
Dorr V. School District, 940. 
Dorrill v. Eaton, 169. 
Dorsey v. Thompson, 104. 
Dorsey v. St. Louis, etc. R. R., 881 

934 
Doty V. Martin, 896. 
Doty V. Wilson, 88, 89, 960. 
Douglass V. Malting, 194 
Douglass V. Scott, 47. 
Dow V. aark, 919. 
Dow V. Sanborn, 166. 
Downer v. Cheeeeborough, OSl 
Downing v. Dearborn, 181. 
Doyle V. Dixon, 69. 
Drake's Appeal, 167. 
Drake v. I/eaman, 67. 
Draper v. Fletcher, 994 
Dresser v. Dresser, 69. 
Dresel v. Jordan, 79. 
Drummond v. Humphreys, 838. 
Duble V. Batts, 14 
Duche V. Wilson, 311. 
Dudley v. Briggs, 210. 
Durgen v. Dyer, 179. 
Dunbar v. Harden, 940. 
Duncan v. Baker, 994 
Duncan v. Pope, 47. 
Dimham v. Pitkin, 46. 
Dunlop V. Gregory, IW. 
Dunlop V. Higgins, 91. 
Dunn V. Chambers, 170. 
Dunn V. Moore, 63. 
Dunning v. Funk, 76. 
Dunton v. Brown, 106. 
Dwightv. Whitney, 846. 
Dwinnell v. Howard, 988. 
Qykes v. Townsend, 66. 



BDITOB'S IND£X OF 0A8K» CITED. 



R 

Eadfl T. Garondelet, 18, 19. 

fift^e lianuf. Co. t. JenningiL M8. 

East Tenn. R. R. Ca ▼. Steals 08. 

Easter t. White, 59. 

Eaton ▼. Eaton, 110. 

Eaton T. Hill, 118. 

Eaton ▼. Uncoln, 87. 

Eaton T. Winnie, 159. 

Ecker t. McAllister, 70. 

Edaon ▼. Qatee, 224. 

EdwardB y. Nelaon, 101. 

E^leeton t. Wagner, 90. 

Biler ▼. GruU, 835. 

Elderkin t. FelJows, 270. 

Eldrod Y. MaUoj, 170. 

Eldridge Y. Holway, 848. 

EUkhart Co. Lodee y. C^ary, 181 

EUhe Y. Judson, 80. 

Eliaaon y. Henehaw, 19, 20. 

EUliaon y. Jackson, 57. 

Elling Y. Vandorlyn, 70. 

EUiot Y. Bradley, 840w 

EUiot Y. Dycke, 240. 

EUiot Y. Stocke, 888. 

Ems Y. Andrews, 150. 

Ellis Y. Bitiar, 85. 

Ellis Y. Bray, 58. 

Ellsworth Y. Cordray, 

Emerine y. O'Brien, 271 

Emerson y. Miller, 885. 

Emerson y. ProYidence Manof • Co.. 

848,840. 
Emory y. IrYing Nat Bank, 281. 
Ennis y Gordon, 72. 
Epich Y. Clifford, 58. 
Erie Railway Co. y. Union, 190. 
Erwin y. Erwin, 2. 
Erwin y. Parham, 72. 
Bakridge y. Olosser, 28. 
Eureka Flour Mills y. Smith, 115. 
EYeringham y. Lord, 248. 
EYeringbam y. Meighan, 74. 
Exchange Bank y. Btob, 919. 



F. 

nOrbanks y. Metcalf , 47. 
Fairchild y. Rogers, 812. 
Farer y. PhUbrick, 172, 19L 
Fareira y. Qabel, 208. 
Farham y. O'Brien, 8a 
Farley's Appeal, 224 
Fsriey y. OeYeland, 212, 990. 
FarnMn' A Meohanics' Bank y. 
OoUnr,84a. 

d 



Faj V. Buiditt, 110. 
FeTdman y. Bier, 978. 
Fellows. Y. Commissionen, 981 
Felton Y. Dickenson, 212. 
FelYin y. Wiseman, 105. 
Fenno y. Weston, 19. 
Fenton y. Clark, 825. 
Ferguson y. NeYille, 101 
Ferguson y. Hosier, 801. 
Ferguson y, Sutphen, 241. 
Ferren y. Moore, 885. 
Ferrier y. Storer, 21, 29L 
Ferris y. Spooner, 281. 
Ferry y; Moore, 858. 
Fessendeu v. Mussey, 50b 
Field Y. Crawford, 219, 
Filson Y. Himes, 191. 
Files Y. McLeod. 220. 
Finnev v. Apgar, 05, 07. 
First N. Bank y. Crocker, 98a 
First Nat Bk. y. Hendric, 181 
First Nat. Bank v. Leerman, 194 
Fisher y. Bush, 188. 
Fisher y. Derring. 282. 
Fibber y. Van Behren, 124 
Fish Y. Chapman, 207. 
Fish Y. aeliand. 157. 
Fitch Y. Saedaker, 88. 
Fitts V. HaU, 118. 
Fitzgerald y. Reed, 111 
Flannagan y. Kilcome, 7a 
Flanders y. Fay, 209. 
Flemming y. Beck, 8ia 
Flint Y. Cadenasso, 212. 
FJoyd Acceptances, 101 
Fonda y. Van Horn, 105. 
Forbes y. Haymann, 88a 
Force y. Dutcher, 888. 
Forcheimer y. Stuart, 80a 
Ford Y. Mitchell, 278. 
Forsyth y. State, 187. 
Foster y. Fame, 220. 
Foster y. Robinson, 24a 
Fountain Coal Co. y. PheliML 84i 
Fox V. Kitten, 281. 
Fox Y. Turner, 14, 19. 
fVanklin Y. Long, 80a 
Fray y. Sterling, 02. 
Frazier y. Hendren, 841 
Freeman y. RoUand, lia 
Freiberg y. Beach HoteL tia 

885. 
French y. New, 20a 
Frentress y. Markle, 20a 
Freyman y. Knecht, 80a 
FHan Y. Babcock, 22a 
Friend y. MiUer, 810. 
Fried y. Royal Ins. Oo», 91 
FKiUiY.LawMMM^91 



UULfi 



EDiTUU*8 liNIiEX OF CA8£S CITED. 



FVont St. R R. Go. ▼. Batl«r, 890. 

Frost T. Belmont, 18i. 

Frost T. Johnson, 8S. 

Fry ▼. Franklin, 15. 

Fry T. putt, 57. 

Fuller ▼. Dane, 184. 

Fuller T. Ellis, 888. 

Fuller ▼. Green, 178, 827. 

Fuller V. Hasbrouck, 804. 

FullertoQ ▼. Sturgis, 887. 

IVirman ▼. Titus» 166. 

o. 

Oage ▼. Ewlng, 816L 
Gage ▼. Lewis, IM. 
Gale y. Tappon, 860. 
Galloway v. Barr, 78. 
Galpin t. Atwater, 886. 
Gait V. Galloway, 860. 
Garland v. Reynolds, 848L 
Garnett ▼. Kirkman, 76, 
Gamer t. Cook, 105. 
Garrison t. Nute, 188. 
Gates ▼. Brown, 857. 
Gates ▼. Hughes, 868. 
Gfites T. Nixon, 55. 
Giites ▼. ShulU, 76. 
Givult ▼. Stormounty 08L 
Guy ▼. Botts, 80. 
Giiylord t. Soragen, 198. 
G<ier V. Council Bluffs, 185. 
Giorge V. Bartlett, 849. 
G x>rge T. Skivington, 160. 
Gdrry ▼. Stiinpeon, 47. 
G 3tchell ▼. Maney, 884. 
Geylin ▼. De Villeroy, 84S. 
Cfibbs T. linaberry, 184. 
(MbneyT. Curtis, 849. 
(HbsouT. Pelke, 189. 
'HlbertY. Baxter, 19. 
Villain y. Looney, 198. 
}Ulespie, In re, 828. 
lillespie ▼. Edmunston, 88L 
jlill V. BeckwaU, 57. 
>illighan v. Board man, 57. 
3^111 V. Ferris, 188. 
lilson V. Spear, 118. 
3ilmore ▼. Pope, 848. 
QiTen ▼. Lemoine, 846. 
Glasgow ▼. Hobb, 68. 
Glass ▼. Beach, 80. 
Glasscock ▼. Glasscock, 46. 
Gleason t. Dyke, 99. 
Glenn ▼. Farmers* Bank, 178. 
Glen T. Hope Mut. Ins. Co., 818. 
Goddard ▼. Binn^, 65. 
OoeMT. I4rnn,8a. 



Gonzales ▼. Cartin, 6S. 
Goldsby ▼. Robertson, 98L 
Gooch T. Holmes, 65. 
Goodlete t. Kelly, 46. 
Goodale v. Thurman, 187. 
Goodrich T. Hubbard, 818. 
Goodspeed y. Wiard Plow Oow, 14. 

88. 
Goodnow y. Empire Lumber Gck, 

108. 
Goodwin y. Follett, 88. 
Goodwin y. Merrill, 90. 
Gorden y. Butler, 156w 
Gordei^ y. Gorden, 80. 
Gorden y. Moore, 49. 
Goes y. Elliason, 85. 
Goes y. Stevens. 835. 
Goucher y. N. W. Ins. Co., 148. 
Gould y. Banks, 28a 
Gould y. Butler, 88. 
Gould y. Murch, 834. 
Gouvenor y. Petcb, 18L 
Gower y. Emery. 889. 
Grace y. Mitchell, 839. 
Grafton y. Cummings, 65^ 58L 
Gragg y. Brown, 84£ 
Grant y. Grant, 157. 
Grant y. Johnson, 894. 
Grant y. Ludlow, 884. 
Gray y. Hadkinson, 49. 
Gray y. Hook, 184. 
Gray y. McR^nolds, IBL 
Greentree y. Koasenstock, 88IL 
Green y. Brookins, 65b 
Green y. Clark, 47. 
Green y. Estes, 59. 
Green y. Firbt Parish Maiden, M, 
Green v. Gilbert, 825. 
Green y. Green, 103. 
Green y. Merchants* Ins. Co., 146. 
Green y. Probate Judge, 44. 
Green y. Wells, 868. 
Green y. Welding, 105, 106. 
Gregory y. Logan, 57. 
Gregory v. Wendell, 185, 179, 80a 
Gregory y. Wattowa, 179. 
Greenstine y. Burchard, 849. 
Gray v. Tubbs, 254. 
Gribben y. Maxwell, 116L 
Griffith V. Wells, 178. 
Gregg y. Landis, 254. 
Griffin y. Culver, 309, 818. 
Grinnell v. Buchanan, 843. 
Griswold y. Carthage, eta B. R 

Co., 824. 
Grubb y. Sull, 836. 
Guild v. Butler, 815. 
Guilick y. Grover, 857. 
Gunn y. Gautine, 84& 



EDFTOB'S INDEX OF CASES CITED. 



VII 



Qudtud T« Brandy 7I20» 
Quthman ▼. Kewin, 375. 
Qathrie ▼. Wabash B. B. Ca, VH. 

H. 

Habreoht t. Alexander, 104. 

Hadlej ▼. Clinton Impt Co., 848. 

Haight ▼. Bacon, 131. 

Haines t. Tucker, 285, 29S. 

Hall ▼. Oaritt, 184. 

Hall ▼. Huntoon, 844. 

Hall ▼. Junction B. R Co., 840L 

Hall ▼. Lauderdale, 84a 

Hall ▼. Harston, 213. 

Hale Mfg. Co. ▼. Amer. By. Sup- 
ply Co., 71. 

Hale V. Bice, 101. 

Hallett V. Norion, 172. 

HaUock ▼. Commercial Ins. Ca, 24. 

Holloday ▼. Patterson, 184. 

Halsa y. Halsa, 67. 

EUunet ▼. Letcher, 125. 

Hamblin ▼. Duneford, 818. 

Haoiilton ▼. Hamilton, 188. 

Hamilton ▼• Lycoming Ins. Co., 
28.28. 

Hamilton y. Thrall. 290. 

Hanuner y. Schoenf elder, 810. 

Hananer y. Doane, 192. 

Hancock y. N. Y. Life Ins. Co., 
281. 

Hancock y. Yunker, 848. 

Hanf ord y. McNair, 883. 

Hannah y. Bichmond, eta B. B., 



Hannibal Bank y. North Mo. Coal 

Ca, 114. 
Harder y. Marion Co. Com., 808. 
Hardy y. Waters, 106. 
Hardman y. Wolf stein, 65. 
Hargroye y. Cook, 57. 
Harmcmy y. Bingham, 164, 822L 
Harriman y. Harriman, 88. 
Harriman, The, 822. 
Harris y. Boberts, 184. 
Harrington y. Fall Biyer Inm 

Works, 825. 
Hames y. Dipple, 105. 
Harper y. Oraham, 88. 
Harper y. Harper. 62. 
Harper y. Littt^ 860. 
Harrison y. Missouri Pfto. B. B. 

Co., 822. 
Harrison y. MoHenry, 387. 
Harrison y. Close, 88. 
Hartford, eta B. B. Co. y. Jaok- 

800,128. 



Harting y. Witte, 284. 

Hasbrouck y. Tappen, 26ft. 

Haskell y. Wright, 285. 

Haskins y. Boyster, 210. 

Haslock y. Meyers, 294. 

Hatch y. Douglass, 179. 

Hatch y. Mann, 181. 

Hansen y. Myer, 232. 

Hansen y. Lamount, 55. 

Hawks y. Naglee, 187. 

Hay y. Gronoble, 812. 

Hay nee y. Bennett, 108. 

Hazlett y. Sinclair, 234. 

Hazard y. Loring, 275. 

Hazard y. N. E. Marine Ins. Ooi., 

130. 
Heam y. Curran, 85. 
Heatwole y. Oorrell, 255. 
Heebstriet y. Beckwith. 224. 
Hecht ▼. Caughson, 212. 
Hedden y. Boberts, 249. 
Heeth y. Car Manuf. & Dock Ca, 

108. 
Heflin y. Milton, 62. 
Hegert y. Indiana Asbury Uniy., 

72. 
Hemingway y. Stansell, 816. 
Henderson y. Louck, 299. 
Henderson y. Bailroad Ca, 86^ 
Hendrick y. Lindsay, 212. 
Hendricks y. Basson, 46. 
Henry y. Bishop, 240. 
Hersey y. VerriU, 245. 
Herring y. Skaggs, 335. 
Hers y. Griggs, 240. 
Hey woody. Tillson, 210l 
Hicks y. Burhans, 98. 
Hicks y. State, 45. 
Hill y. Baker, 104. 
HiU y. Balls, 155. j 

Hill y. Blake, 269, 292» 
Hill y. Chipman, 292L 
Hill y. Frost, 60. 
Hill y. Jamison, 62. 
Hill y. Morse, 44. 
Hill y. Spear, 192. 
Himrod Furnace Go. T. 

B. R Co., 58. 
Hinkley y. Fowler, 212. 
Hinkle y. Minneapolis, 88^ 
Hines y. Barker, 826. 
Hinton y. Locke, 249. 
Hoare y. Bennie, 292. 
Hodgson y. Barrett, 299. 
Hoffman y. Yallejo, 181 
Hogan y. Kurts, 818. 
Hogins y. Plympton, 80Ql 
Hogg y. Ashman, 818. 

T. Annstrong; 81 



UULVili 



EDITOR'S IT^DEX OF CASES CITED 



Holden St IDU Co. t. Wwtarreth, 

894. 
HoUiBter t. Abbott. 44. 
HoUiB T. Chapman, 294. 
Holloway v. Orifflth, 281 
Holmes ▼. Boyd, 82. 
Holmes ▼. Clark, 159. 
Holmes ▼. Richett, 188i 
Holmes ▼. Bioe, lOS. 
Holt ▼. Gage, 819. 
Holteer ▼. Sohmidt, 124. 
Home ▼. Chatham. 248. 
Homer v. .Thwing, 118. 
Hook ▼. DonaldBOQ, 108. 
Hooven ▼. Sidener, 800, 
Horton y. Moffitt, 828. 
Horton v. MoCartj, 67. 
Hoeford ▼. Kanauee, 212. 
Ho6mer y. WUson, 281, 28S. 
Hotchkins y. Hodge, 187. 
Houghton y. Houghton, 82. 
Houghwout y. Boisaubien, 14« 26, 

28. 
Houtaling y. Ball, 82. 
Hoyey y. Brown. 886. 
Hoyey y. Page, 288. 

Howard y. Daly, 14, 281. 
Howard y. Hoery, 181. 
Howard y. Maasmgale, 47. 

Howard y. Wilmington B. R., 282. 
Howe y. BnfEak), N. T. & Erie R 
R, 889. 

Howe y. Tasgart, 75. 

Howe Mftohine Co. y. Brysoo, 818. 

Howell y. Field, 8a 

Howell y. Stewart, 192. 

Howland y. CoflOn. 184, 288. 

Howiand y. Lounda, 88. 

Howiey y. Farrar, 80. 

Howley y. Keeler, 288. 

Hoyt y. Casey, 111. 

Hoy t y. Thompson, 224 

Hubbard y. Belden, 825. 

Hubbard y. Commings, 108* 

Hubbard y. Russell, 812. 

Huckinsy. Hunt, 181. 

Huckley y. Headley, 184. 

Hudson y. MoCartney, 180. 

Huff y. Walkins, 224. 

Humble y. Mitchell, 86. 

Hunt y. Douglass, 843. 

Hunt y. Johnson, 74. 

Hunt y. Jones, 62. 

Hunt y. Litchfield, 186. 

Hunt y. Wyman, 264. 

Hunter y. Qiddings, 58. 

Hard y. Densmore, 810. 

Hussey y. Elirkman, 819L 

Hosted y. Craig, 80& 



HuBton A T. a R R. Co. y. Hill, 

810, 812. 
Hutchms y. Aloott, 278. 
Hutchins y. Hebbard, 828, 868w 
Hutchinson y. Bower, 846L 
Hutchinson y. Hutchinson, 82. 
Hyderyille Co. y. Eagle Slate Co.. 



DUnois, eta R R Co. y. Bunner. 

105,108. 
Illinois Cent. R R Co. y. Cobb, 

310. 
Indiana y. Worman^ 115. 
Ingraham y. Baldwm, 118. 
Innskeep y. Leoony, 204. 
International R R Co. y. Dawson, 

184. 
Ireland y. Geharty, 85b 
Irwin y. Atkins, 22a 
Irwin y. Irwin, 108. 
Irwin y. Williar, 179, 908L 
lyea y. Carter, 158. 

J. 

James y. Adams, 281. 

James y. Fulcrod, 72. 

James y. Patten, 58. 

Jaclmon y. Johnson, 818L 

Jackson y. Sheldon, 240. 

Jaoqueth y. Hudson, 255. 

Jaudon y. Randall, 220. 

Jefferson y. Heil, 48. 

Jeffreys y. Bigelow, 155, 854 

Jefts y. York, 188. 

Jenks y. Robertson, 288. 

Jenkins y. French, 224 

Jenkins y. Pye, 189. 

Jenness y. Lane, 82. 

Jenness y. Shaw, 292. 

Jenness y. Mt Hope Iron Co., 2(> 

72. 
Jennings y. Lyons, 825. 
Jewell y. Schoepple, 268. 
Jewett y. Petit, 819. 
Johnson y. Barber, 854. 
Johnson y. Bennett, 245^ 
Johnson y. Bemey. 159. 
Johnson y. HubbeU, 146. 
Johnson y. Hunt, 188, 815. 
Johnson y. McGruder, 888. 
Johnson y. Moore, 827. 
Johnson y. Ollerwein Uniy., 78L 
Johnson y. Stephenson* 20^ 
Johnson y. Sellers, 87. 
Johnson y. Smith, 18& 



EDnOB'8 INDSZ OF CASES dTESD. 



I T. IhlTiB, 811. 

Johnsofi T. Whitman, 800L 
JohiMon ▼. Whittemore, 2M. 
JoDflB ▼. Atkinson, 88S. 
Jones ▼• Blocker, 310. 
Jones ▼• Hardest, OSL 
Jones ▼. Jndd, 82a 
Jones ▼. Nathiop, 818l 
Jones ▼. Perkins, 96, 
Jones ▼• Poach. 88. 
Jones ▼• Bittenhoose, 78. 
Jones ▼. Stanler, 210. 
Jones ▼• United Sutes, 881 
Jones ▼. Walker, 220. 
Jordan ▼. Davis, 48. 
Jordan ▼• Osffood, 168. 
Jordan ▼. Wilson, 70. 
Jndson ▼. Corooran, 888» 884. 
Justioe ▼• Lang, 9, 6& 



Kamena ▼. Hnelbig, 828, 881 

Keen ▼. DaTis, 851. 

Keamej ▼. Vaagh, 201 

Keeler ▼. Tkylor, 188. 

Keen ▼. Sage, 218. 

Keep ▼. Goodrich, TIL 

Kein t. Tapper, 90. 

KeUy ▼. Bins, 858. 

Keller ▼. Halderman, 8l 

Keller T. Yham, 1& 

Kellogg ▼. Bichards, 88. 

Kellogx ▼. Bobison, 288. 

Kemble ▼. Keen, 818. 

Kemp ▼. Hamphrey, 851 

Kemp ▼. Walker, 48. 

KeniMdy ▼. Owen, 281 

Kent ▼. Bomskein, 848. 

Kent ▼. Kent, 62. 

Kentack J Bank ▼. Combs, 888b 

Kiersted ▼. Orange A A. B. B. Co., 

848w 
Khidig T. March, 857. 
Kingcm ▼• Toong, 61 
Kirkpaftrick y. Adams, 179, 808. 
Qzl^MHtriok ▼. Alexander, 808. 
mrkpstrick ▼. Binsall, 179. 
Qrtpatrick ▼. Strainer, 84& 
KhnbaU, The, 278. 
Kimball ▼. Goodbam, 251 
S3mball ▼. Nojes, 212. 
Khnball ▼. Yroman, 261 
KingT.DooUttie, 129. 
Khi^y. Upton, 75. 
'^ ▼• Wood, 57. 

r T. DaTis, 868. 

r T. Mccris, 880b 



Kbmej t. Leggett, 181 
Kitainger ▼. Sanborn, 881 
Kleckley t. Leyden, 178. 
Kleeman v. Frisbie, 221 
Knapp ▼. Bock, 41 
Knight T.Cooley, 18. 
Knowlton ▼. Congress, eta, 18k 
Koonta y. Kennedy, 827. 
Krapp y. Eldredge, 816. 
Krebs y. Olmstead, 819. 
Krohn y. Bantz, 68. 
Kromer y. Heim, 815. 
Kramer y. Heines, 81 



La Farge y. Herter, 261 
La Grange y. Ward, 41 
Laidlaw y. Organ, 181 
Lakemany. Pollard, 826. 
Lallimore y. Hansen, 82. 
Lampeon y. Cummings, 800. 
Lamoreaoz y. Gould, 72. 
Lancaster Bank y. Moore^ 111 
Landers y. Bolton, 240. 
Lane y. Shackiord. 62. 
Lane y. Smith, 221 
Langdon y. Bichardson, 51 
Lankton y. Stewart, 88, 811 
Lansden y. McCarthy, 221 
Tanwing y. Dodd, 255, 
Larkin y. Buck, 291 
Larkin y. Harden, 260. 
Larkins y. Mitchell, 90. 
Larmon y. Jordan, 25, 21 
Larned y. Andrew, 171 
Larsen y. Jensen, 59. 
Lash y. Parlin, 244. 
Latham y. Udell, 166. 
Lathrop y. Knapp, 72. 
Lattimore y. Simmons, 221 881 
Lawrenoe y. Cook, 61. 
Lawrence y. Dayey, 81 
Lawrence y. Dole, 261 
Lawrence y. Fox, 212. 
Lawrence y. Kiddie, 188. 
Lawrence y. McCalmot, 71 
Lawrence y. Miller, 261 
Lauber y. Bangs, 141. 
Layman y. Conray, 161 
Leach y. Nichols, 121 
Ledbetter y. Walker. 881 
Lee y. Ashbrook, 291 
Le Fever y. Le Fever, 261 
Lening y. Gould, 81 
Leonard y. Duffln, 80. 
Leppla y. Mackey, 881 
Unh y. GaUup, 68. 



EDITOR'S INDEX OF CASES CUED. 



Lealie t. Langfaam, ML 
lawj ▼. Cohen, 28. 
Lewis ▼. Alexander, 198. 
Lewis ▼. Atlaa Hut. Ina. Co., 818. 
Lewis y. Browning, 24. 
Lewis T. Kerr, 800. 
Lewis ▼. Sanger, 218. 
LewisT. Welch, 172. 
Lexington Ins. Co. ▼. Parer, 148. 
liebeka ▼. Methuda, 945. 
LOlie ▼. Hon, 840. 
Lincoln t. Buckmaster, 116L 
Linden ▼. Carpenter, 184. 
Lindeman t. Desborough, 149. 
Lincoln v. Erie Preeerr. Co., 18. 
Litchfield ▼. Garrett, 262. 
Litchfield ▼. Hutchison, 169. 
LitUefield ▼. Albany Co. Bank, 224. 
Liyingston ▼• Maryland Ins. Co., 

142. 
liTingston ▼. Peru Iron Co., 150. 
Uvingston ▼. Radcliff, 263. 
Liyingston y. Rogers, 72. 
Loach y. Famum, 268. 
Lochenmeyer y. Fogarty, 878. 
Lodge y. Dices, 263. 
Loeb y. Drakeford, 84& 
Logan y. Mathew, 75. 
London Assurance y. Hansel, 151. 
London y. Haggerstown, etaiBank, 

845. 
Long y. Hartwell, 209. 
Long y, Towl, 74. 
Longworth y. Mitchell, 8L 
Lonsdale y. Brown, 93. 
Lord y. Wheeler, ZU. 
Lord y. Wilcox, 810. 
Loomis.y. Newhall, 80, 190. 
Loomis y. Simpson, 848. 
Louisyille, etc. R R Co. y. Sum- 

iMr, 184. 
Louisyille, eta R R Co. y. Oood- 
' bar, 224. 

Love y. Harvey, 170. 
Loyey y. Burd, 106. 
LoyeU y. St Louis Mut. life Ins. 

Ca,286. 
Loyering y. Lovering, 284. 
Low y. Andrews, 62. 
Low y. Leaman, 248. 
Lowry y. Dillman, 179. 
Lucas y. Caulter, 155. 
Lnddington y. Bell, 263. 
Ludlow y. Hardy, 92. 
LungstrausB y. Gierman Ina. Co., 

84. 
Lata y. Linthicum, 848. 
LuU y. Thompson, 290. 
L^man y. Qeaney, 240. 



Lyman y. Robinson, 18L 
Lynch y. Austin, 220. 
Lyon y. Culbertson, ITBl 
Lyon y. Jerome, 843. 
Lyon y. Lenon, 244. 
Lyon y. Mitchell, 184. 
Lyon y. Phillips, 110. 
Ly<Hi y. Respass, 192, 
I^on y. Waldo, 190. 

M. 

Maodowell y. Laer, 818. 
Mackey y. Peterson, 184. 
Maclay y. Hanrey, 21. 
Mactier y. Frith, 15, 21, 28, 84. 

Macurdy y. Rogers, 188. 
Mairer y. Canavan, 203. 
Maitland v. Martin, 889. 
Malle y. Willett. 185. 
Malloy y. Gillett. 59. 
Malone y. Morton, 352. 
Malstrom y. Hopkins, 208. 
Maltby y. Austin, 254. 
Mandelbaum y. Gregorich, 178i 
Mandelbaum y. McDonald, 187. 
Mandeville y. Welsh, 224. 
Manning y. Gasharie, 835. 
Mansfield y. Inhabitants. 849. 
Marble Co. y. Ripley, 813. 
Marcy v. Marcy, 62. 
Marine Bank y» Ogden, lIQb 
Maryin y. Treat, 83. 
Markel y. Mundy, 150w 
Marsh y. Fairbury, 184. 
Marsh y. Falker, 159. 
Marshall y. Hubbard, lOt 
Marston y. Knight, 300. 
Martin, In re, 166. 
Martin y. Adams, 264. 
Martin y. Black, 21. 
Martin y. Dryman, 234. 
Martin y. Hcunlin, 826. 
Martin y. Tradesmen, 327. 
Marx y. McGlynn, 167. 
Mason y. Campbell, 101, 315. 
Masterton y. Mayor, 813. 
Masury y. South worth, 233. 
Materne y. Horwitz, 181. 
Materson y. Howard, 104. 
Mathieson, etc. Refining Co. y. 

McMahon, 860. 
Mathis V. Thomas, 275. 
Mathews y. Cowan, 113. 
Mathews y. LiKht, 841. 
Mathews y. Lindsley, 276^ 
Mauler y. Churchill, 74. 
MaxweU y. Clark, 311 



EDITOR'S INDEX OF CASES CITED. 



Haxwdl ▼. Day, 263. 
Maxwell y. Graves, 263. 
ICay ▼. Ward, 57. 
Haynard v. Tabor, 10. 
Mayo ▼. Canrington, 169. 
McAndrewB ▼. StiUwell, 24a 
McArtbuT ▼. Sean, 267. 
McBlair ▼. Qibbs, 190. 
McBrahey v. Chandler, 18i. 
McOall V. Braham, 818. 
McCall ▼. Gapehart, 181, 186. 
McC^ T. Nave, 86. 
MoCarty ▼. Beach, 49. 
McCarty ▼. Hampton Bid. Aflaooia- 

tion, 82. 
McCan v. Atherton, 47. 
MoCleUan v. Sanford, 62^ 
McCture v. Mo. Biver B. B. Co., 

184. 
MoClare ▼. Wilson, 72. 
McCormick v. Basal, 281. . 
McCormick v. Cheevers, 246. 
MoConnel v. Pillhart, 55, 5a 
MoCoy v. Bizbv, 290. 
McCracken v. San FranciBOO, 887. 
McCuUough V. Day, 46. 
MoCordv T. Rogers, 21. 
McDonald ▼. Boering, 16. 
McDonald ▼. Fleming, 187. 
McDonald ▼. Snelling, 160. 
McDonel ▼. State, 104. 
McElvin ▼. Sloan, 80. 
McElrqy ▼. Buck, 58. 
McElroy v. Ludlnm, 62. 
McOraw v. Storgeon, 270. 
McOuire ▼. Bidwell, 278. 
McOuire v. Gorrine, 191. 
Mclntyre v. Kennedy, 278L 
McKee v. Vincent, 279. 
McKenzie ▼. Nevine, 848. 
McKinney ▼. Andrews, 198. 
McKinney v. Bradlee, 264. 
McKinley ▼. Watkins, 75. 
McKinnon ▼. McEwan, 810. 
McKisBon ▼. Stanberry, 220. 
McKende ▼. Collins, 156. 
McLanahan ▼. Univ. Ins. Co., 146. 
McLaughlin v. McMangill, 46. 
Mcliellan ▼. Rope, 220. 
McMahon v. Smith, 186. 
McMillan v. Ames, 49. 
McMurphy v. Qarland, 268. 
McNair v. Toller, 104. 
McNichola v. Reynolds, 269. 
McVeigh ▼. United States, 104. 
Meade v. Watson, 59. 
Meadows v. Meadows, 67. 
Medbttiy ▼. Watson, 156. 
Madlin ▼. Flatty 827. 



Melcher v. Flanders, 240. 
Meilen v. Whipple, 212. 
Mentz V. American Fire 

186, 
Meriden ▼. Zingeen, 60. 
Merrick's Estate, 848. 
Merrill ▼. Nightingale, 181. 
Merrill v. Wilson, 852. 
Merritt v. Oiddings, 87, 98. 
Mersey Co. v. Naylor, 292. 
Metherdy v. Ross, 18. 
Methiason v. McMahon, 116. 
Metropolis Bank ▼. Jersey 

Bank, 212. 
Michael v. Bacon, 192. 
Michael v. Jones, 844, 848. 
Michigan College v. Charlesworth 

849. 
Michigan State Bank ▼• Hammoi. J 

104. 
Migell V. Burnett, 21. 
Milbery v. Storer, 827. 
Milldam Foundry v. Henry, 268 
Millard v. Baldwin, 212. 
Millard v. Thome, 268. 
Miller v. Eno, 800. 
Miller v. Goddard, 267. 
Miller v. Finley, 116. 
Miller v. Jannett, 812. 
Miller v. Kendig, 81. 
Miller v. NewhaU, 224. 
Mills V. Mills, 184w 
Mills V. Stete, 292. 
Mills V. Wyman, 80. 
Milroy v. Spur Mt Iron Co., 224. 
Miner v. Lorman, 819. 
Miner v. Sharon, 155. 
Minnesota Oil Co. v. Collier Leao 

Co., 24. 
Mississippi, eta R. R. Co. v 

Green, 282. 
Missouri Bank v. Sabin, 72. 
Mitchell V. Ryan, 46. 
Mixer v. Sibley, 104. 
Mobberly v. Mobberly, 245. 
Mobile, etc. v. Qurney, 244. 
Mohawk & Hud. River R 

V. Costigan, 8:^9. 
Monroe v. Perkins, 82, 268^ 
Montague v. Allen, 166. 
Montague v. Qamett, 62. 
Montgomery v. Edwards, 55. 
Montgomery v. Lampton, 101. 
Moote V. Scriven, 254. 
Moore v. Appleton, 889. 
Moore v. Detroit Looomoll 

Works, 82, 268. 
Moore v. Dunn, 816. 
Moore v. Fowler, 262. 



zlii 



EDITOR'S INDEX OF CAfiBB CITEa 



Moore t. Gfles, 46. 

Moore ▼. lyen, 827. 

Moore ▼. Mandelbaum, 841. 

Moore ▼. M6t3t>politan Bank, 821 

Moore t. Moore, 841. 

Moore ▼. Pierson, 28. 

Moore ▼. Walla Walla, 47. 

Mordecai ▼. Dawkine, 109L 

Morelapd v. Atchison, 167, 

Morgan ▼. Berg;en, 254. 

MQrf;an v. McKee, 282. 

Monn T. Marts, 68. 

Morrill y. Tehama, 18. 

Morris ▼. Osterhouse, 08. 

Morris Run Coal Co. t. Barclay 

Coal Co., 188. 
Morris Coal Co. ▼. Everrett, 161. 
Morrison ▼. Davis & Co., 287. 
Morrison ▼. Gkirth, 827. 
Morrison r. Lynch, 222. 
Morrow ▼. Higgins, 888. 
Morse v. Burnett, 188, 190. 
Morse ▼. Rathbum, 255. 
Morse v. Ryan, 184. 
Morse ▼. Tappoii, 44. 
Morton ▼. IXean, 66. 
Moss V. Averille, 114, 116. 
Mott y. Hicks, 61. 
Motiey y. Head, 860. 
Moolton y. Am. life Int. Co., 

149. 
Moolton y. Kershaw, 18. 
Mound City Land A W. Assa y. 

filaoson, 71. 
Mountioy y. Metiger, 281. 
Mt Washington Hotel y. Marsh, 

114. 
Much y. Stoner, 224. 
Muckenburg y. Holler, 188. 
Muir y. Schenck, 222. 
Mulcrane y. Am. Lumb. Ca, 60. 
Mulholland y. Bartlett, 76. 
Mulhall y. Quinn, 224. 
Mumf ord y. Wilson, 262. 
Mundorf y. Howard, 146. 
Municke y. Falk, 65. 
Murphy y. Hanrahan, 226. 
Murphy y. Helmrich, 861. 
Murphy y. St. Louis, 294. 
Murdock y. Dickson, 222. 
Murry y. Snow, 87. 
Mutual Ins. Co. y. Hilyard, 104. 
Mutual life Ino. Co. y. Hunt, 

116. 
Muselman y. Stoner, 269. 
Musser y. Ferguson, 80. 
Myers y. Munson. 241. 
Myws y. Hart, 266. 
Ujmn y. Brighton, 260. 



N. 

NaBhy.Lon,70. 

Nashyille R R Co. y. Dayid, mi. 
National Bank y. Hall. 90. 
National Bank y. Segur, 284. ' 
Neal y. Saunderson, 267, 
Needles y. Shaffer, 829. 
Negley y. Jeffers, 269. 
Newberry y. Hill, 222. 
NewhaU y. Clark, 80S. 
Newsan y. Lostin, 240. 
Newton y. Bronson, 66. 
Newton y. Chicago, eto. BTy Co., 

82. 
New York R. R. Co. y« Pixley, 14 
Niagara Falls Ins. Co. y. Qreen, 62. 
Nichols y. Weaver, 61. 
Nicholson v. Combs, 827. 
Nickerson v. Swift, 827. 
Niver v. Roesman, 255. 
Noble v. Ames Manuf. Ca, 809. 
Noel v. Murrv, 278. 
Noeting y. Wright, 166. 
Noice y. Brown, 210. 
Norrington y. Wright, 141, 292, 

805. 
North y. Wendell, 66. 
Northwestern Mutual Inib Co. ▼• 

Blankenship, 116. 
Northwestern Iron Co. y. Meadtb 

19,20. 
Norton y. Brown, 262. 
Noyes y. Loring, 188^ 84a 
Nugent y. Wolf, 69. 
NuU y. Humphrey, 246. 

o. 

Oakland Savings Bank y. Appl»> 

garth, 275. 
Oatfield V. Warring, 98. 
O'Brien v. Briettexibach, 196. 
O'Connor v. Arnold, 837, 848 
O'Connor y. Beckwith, 98. 
O'Donndl v. Leman, 66, 67. 
Oehnch y. Ford, 848. 
OTallin v. Kennedy, 251 
Ogden y. Raymond, 844. 
Oglebv v. Helen, 815. 
Ohio Wesleyan Female CoQege y. 

Love, 72. 
Oliver v. Hendlet, 105. 
0*Rourk v. Ferdval, 160. 
Oregon Steam Nav. Co. y. Winaor, 

188. 
Oregonian R'y Co. ▼. Oregon R*y 

Co., 44. 



EDITOR'S INDEX OF GASES CITED. 



ziJii 



Origaa ▼. Stewart, 2/n. 
Ort ▼. Fowler, 124. 
Ormerod ▼. Deaiman, 18QL 
Ortrecan ▼. Dickson, 40. 
OBboni ▼. HofPnian, 8S. 
OBbome t. Poket, 810. 
OBcanjan v. Arms Ga, 184 
Osiar r. HofiFa, 80, 92. 
Otis T. Spencer, 46. 
Owen ▼. Lang, 106. 
Owens T. Stevens, 82. 
Oxford Nat. Bank ▼. Kirk, 18QL 



Packard ▼. Richardson, (TT. 

Packer v. Stewart, 269. 

Pacific a R. Ca ▼. Beeley, 184ii 

Paddock ▼. Strobridge, 166. 

Paget T. Oakes, 816. 

Pagbom ▼. Westlake, 171, 

Pauie y. TiUinghast, 886. 

Palmer ▼. Palmer, 46. 

Palmer ▼. Phoenix Life Ina. Go., 21. 

Parcel! v. McGomber, 294. 

Paret y. City of Bajonne, 114. 

Paris y. Whitney, 284. 

Parker y. Butterworth, 818. 

Parker y. Enslow, 76. 

Parker y. Pettit, 81, 276. 

Parker y. Shefford, 819. 

Parka y. McKaney, 196. 

Parsons y. Keyes, 112. 

Parsons y. Loucka, 66. 

Parsons y. Tellman, 220. 

Partridge y. Hood, 186. 

Palo Pinto Co. y. Gano, 281 

Patchin y. Swift, 67. 

Paton y. Goit, 178, 229. 

Patten y. Deehon, 232. 

Patterson y. Kirkland, 184, 

Pattison y. Shaw, 104. 

Payne v. Dwinell, 278. 

Peal y. McDoweU, 116. 

Pearce y. Willson, 186. 

Pease y. Sabin, 181. 

Peck y. Vandemark, (77. 

Peck y. Briggs, 192. 

Peckham Iron Go. y. Harper, 841. 

Peckham y. Winter, 64. 

Peelman y. Peelman, 87. 

Peigne y. SutclifF, 118. 

Peltz y. Eichele, 190. 

Pendergrass y. N. Y. Uanuf. Co., 

816. 
Penn. Goal Go. y. Sanderson, 249. 
Pennsylyania R R Ga y. Atha, 

886. 
Pumjb&akm ▼• Johm^ 866b 



Pennlman y. Hartshorn, 68L 

Penny wit y, Foote, 44. 

Penrose y. Gurren, 118. 

People y. Graham, 45. 

People y. Insurance Co., 888b 

People y. Talmage, 104. 

People's Bank y. Gi^ of New 

York, 184. 
Perkins y. Eaton, 176. 
Perkins y. Hudsell, 68. 
Perkins y. Lockwood, 87. 
Perkins y. Lyman, 265. 
Perrin y. Cheeseman, 48, 461 
Perrin y. Dunn, 186. 
Perrin y. Lipper, 288. 
Perrin y. Noyea, 229. 
Perrin y. Wilson, 111. 
Perry y. Chessly, 819. 
Perry y. Whitney, 157, 
Pettis y. Ray. 86, 816. 
Phelps y. Hubbard, 274. 
Phelps y. Stillings, 68. 
Phelps y. Zucklay, 164. 
Philadelphia Appeal, SKM, 
Phillips y. Adams, 68. 
Phillips y. Hatch, 104. 
Phillips V. Thorp, ISa 
Philpott y. Brown, 816. 
Philpotty. Oruninger, 80l 
Phcenix Ins. Go. y. Badger, 18QL 
Phosnix Ins. Go. y. Rink, 82, 
Pickard y. McGormick, 166^ 
Pickles y. State, 865. 
Pierce y. Gooley, 299. 
Pierce y. Indreth, 40. 
Pierce y. Johnson, 862. 
Pierce y. Jung. 255. 
Pierce y. Paine, 62. 
Pierpont y. Wilson, 886. 
Piersol y. Grimes, 827. 
Pierson y. Ballard, 67. 
Piflfer V. Smith, 124. 
Pike V. Brown. 220. 
Pillows y. Roberts, 46. 
Pink ham y. Crocker, 846^ 
Pink ham y. Oreer, 167. 
Pinney y. Ferguson, 276. 
Pipp y. Reynolds, 212. 
Pixler y. Nichols, 294. 
Pixley y. Boynton, 179, 196. 
Placer County y. Astin, 840. 
Piatt y. Brand, 281. 
Poland y. Miller, 131. 
Polaski y. Mut. Life Ins. Gow, 881 
Pool V. Homer, 98. 
Porter y. Dunlap, 224, 
Porter y. Viete, 241. 
Post Clinton R Go. t. ( 
818. ' 



xUt 



£DnOB*8 INDEX OF GASES CITED. 



Post ▼. Kmraaj, 9SL 

Po0t ▼. Mason, 166. 

Potter T. Douglass. 85. 

Potter ▼. Moreland, 248L 

Potts ▼. Plaisted, 275. 

Potti T. Whitehead, 10, SL 

Powell ▼. Charles, 263. 

Powell T. D. S. A G. B. B. Co., 

824. 
Prater ▼. Miller, 74 
Pratt ▼. Langdon, 241. 
Prmj ▼. Burbank, 172. 
Prioe ▼. McAuley, 150. 
Prioe T. Supreme Lodge K. of H., 

180. 
Pritchard v. Norton, 63. 
Propeller Niagara ▼. Cordes, 267. 
Prop, of Canai Bridge ▼. (Gordon, 

114. 
Protection Ins. Co. ▼. Harmer, 142. 
Prout ▼. Wiley, 108. 
ProTidenoe Qas Burner Ca ▼• Bar- 

hey, 855. 
Pryor r. Cain, 72. 
Putnam ▼• Woodbury, 87. 



▼. Wheeler, 20. 
ieyy. De Haas, 220. 
Bank t. HaU, 20, 
T. Boath, 254. 
:k ▼• Thomas, 195. 

R 

Baflroad Go. ▼. Balaton, 184. 
Bailioad Ca ▼. Beeves, 267. 
Bacine Bank ▼. Case, 278. 
Badich ▼. Hutchins, 164, 
Bae T. Hulbert, 44. 
Baisin ▼. dark, 249. 
Bandall y. BandaU, 188. 
Bandall ▼. Beynolds, 224. 
Bankin r. Darnell, 286. 
Ban wells t. Qemer, 116. 
Bathbon t. Budlong, 844. 
Bather r. First Nat. Bank, 172. 
Bauget V. Boll, 191. 
Bay ▼. Thompson, 264. 
Bay ▼. Tubbs, 113. 
Raymond ▼. Leavitt, 188, 192. 
Beady y. Noakes, 72. 
Bedfleld y. Davis, 840. 
Beed y. Braden, 254. 
Beed y. Evans, 57. 
Beed y. McOraw, 262L 
Bead y. McKee, 185. 




Beed y. Wash. Ins. Co., 18QL 

Beeder y. May, 278. 

Beeee Biver Mining Co., In ra, ISt 

Begents v. Detroit, 114. 

Beynolds v. Hassam, 244. 

Beynolds v. Nugent, 82. 

Bhodes v. Cartner, 56, 5& 

Bice y. Candle, 812. 

Bice y. Carter, 220. 

Bice y. Gost, 176. 

Bioe y. Manly, 160, 2ia 

Bich v. Austin, 840. 

Bichards v. Griggs, 224. 

Bichards v. Shaw, 90, 294 

Bichards v. Skiff, 240. 

Bichardson v. Cooper, 269. 

Bichardson v. Crandal, 199. 

Bichardson v. Grundy, 801. 

Richardson v. HockenhuU, 826. 

Richardson v. Noble, 166. 

Richardson v. Pate, 108. 

Richardson v. Pierce, 62. 

Richardson v. Rawlind, 186. 

Richmond v. Robinson, 254. 

Ricketts v. Harvey, 185. 

Rickett v. Sheets, 192. 

Riley v. Albany Savings Bank, 116L 

Rippy y. Grant, 170. 

Robbins v. Ayers, 220. 

Roberts v. Barnum, 87. 

Roberts v. Rockton Ca, 621 

Roberts v. Rumley, 885. 

Robeson y. Bohn, 292. 

Robinson v. Douthit, 246. 

Robinson Machine Works ▼• Chan- 
dler, 181. 

Robinson v. Weeks, 105. 

Robinson v. Bullock, 268L 

Roby v. Cossett, 886. 

Rogers v. Black well 116, 

Rogers v. Hanson, 800. 

Rogers v. March, 84a 

Rogers v. Rogers, 262. 

Rogers v. Sheerer, 808, 

Rogers v. Union Stair Oow, 2ia 

Roll v. Raguet, 185. 

Roper V. Johnson, 281. 

Roquemore v. Allowaj, 192L 

Rood v. Jones, 76. 

Rollins v. Marsh, 82. 

Root V. Merriam, 178. 

Rose Clair Lead Co. ▼. Madden. 
827. 

Rose V. Mitchell, 192. 

Ross v. Doland, 124. 

Rowe v. Whittier, 220. 

Royce v. AUen, 852. 

Ruchizky v. De Haven, 101 

Buckman v. Bryan, 192, 



EDrrOB'S INDEX OF CASES CITED, 



Sit 



jftaoknum ▼. Rnckman, 4flw 
BnddeU ▼. DiUman, 124. 
BafF ▼. Jarrett, 800. 
RalFerij ▼. Largee, 67, 
Ramsey ▼. Berry, 179. 
Baple V. Bindley, 169. 
Bapley ▼. Daggart, 12tl. 
Bappe T. Edwards, 845. 
Bonel ▼. Bundie, 18. 
Bassel ▼. Kirkbride, 2S1 
Boasel r. little, 85. 
BoflBel y. Minor, 299. 
Bjran ▼. Dayton, 294ii 
Ryan ▼ Ulmer, 800. 

8. 

Bage ▼. Jones, 47. 

Sage ▼. Wilcox, 57. 

Salmon Falls Mannf . Co. ▼. God- 
dard, 56. 

Sampson r. Shaw, 179, 188. 

Sanborn ▼. Sanborn, 57. 

Sangbom ▼. Flagler, 66. 

Sanford ▼. Handy, 845. 

Saner ▼. Brinker, 245. 

Sanqnirioo ▼. Benedette, 818. 

Saratoga Coon^ Bank ▼. SQng, 
191. 

Sarage ▼. DaTis, 857. 

Savercool ▼. Farwell, 826. 

SayiUe ▼. Welch, 885. 

Sawyer ▼. Pressart, 19. 

Sawyer ▼. Concord R. R. Co., 824. 

Sawyer v. Cutting, 857, 

Sawyer ▼. ICayhew, 840. 

Bazonia H. & R Co. ▼. Cook, 267. 

Scankm v. Cobb, 116. 

Scharmer ▼. FarweU, 185. 

Scheland ▼. Espelding, 290. 

Schemp ▼. Schent, 186. 

S chene ctady Store Ca t» Hoi- 
brook, 2o. 

Schepflin ▼. Dessar, 853. 

SofaiU T. Meyer, 85, 815. 

SohneU ▼. Nell, 70. 

Schofleld ▼. Walker, 164. 

Scholy ▼. Mnmford, 164. 

ScbolberK ▼. Cheney, 14. 

School Kstrict No. 1 t. Danchy, 
824. 

School Directors ▼. Trefethren, 28. 

School District t. Wood, 51. 114b 

Sdioc^ Tmstees v. Bennett, 822. 

Schreiner ▼. Cummings, 82. 

Scfaroeder t. Fink, 80. 

SehnlU ▼. Colbertson, 18QL 

8dhweidflrT.Lang,85. 



Schwarsbaoh ▼• Pro. Union, 14% 

149. 
ScottT. Fields, 254. 
Scott ▼. Killaning Coal Co., 892. 
Scott ▼. McMillan, 284. 
Scott T. Middleton, eta R. R. Co., 

885. 
Scott ▼. Raymond, 801. 
Scranton r. Stewart, 105, 106. 
Scrudder ▼. Union Nat Bk., 81 
Sea ▼. Carpenter, 888. 
Seaman v. 0*Hara, 269. 
Sears ▼. Brink, 57. 
Sears ▼. Shaffer, 170. 
Seavers r. Phelps, 116. 
Seawright ▼. Payne, 115. 
Sedgwick ▼. Stanton, 184 
Seery v. Socks, 844 
Seidenbinder v. Charles, 196. 
Semmes v. Insurance Co., 888b 
Seyerance y. Kimball, 164 
Seymour y. Menham, 260. 
Seymour y. Malboro, 98. 
Shackford y. Newington, 84L 
Shadman y. Guthrie, 57. 
Shaddle y. Disborough, 71, 
Sharp y. Jones, 848. 
Sharp y. Rogers, 74 
Shaw y. Clark, 179. 
Shaw y. Nudd, 884 
Shaw y. Rep. life Ins. Co., 881. 
Sheehy y. Adame, 62. 
Sheldon H. B. Co. T. 

885. 

Shelters y. Allen, 116. 
Shenk y. Mingle, 187. 
Sherley y. Riggs, 186. 
Sherwood y. Walker, 128. 
Shepard y. Milwaukee, eto., 81Ql 
Shepard y. Rhoades, 101. 
Shepherd y. Toung, 92. 
Shiber y. Shack, 82. 
Shiel V. McVitt, 255. 
Shipman y. Horton, 106. 
Shipman y. Seymour, 156. 
Shirer y. Keller, 278. 
Shirley y. Black, 57. 
Shirley y. Shirley, 58. 
Shu^m y. Rut. & Bur. R. R., 86 
Shouse y. Neiswaanger, 810. 
Shropehire y. Burns, 104 
Shriye v. Bereton, 255. 
Shultz y. BaQey, 838. 
Shults y. Bradley, 269. 
Sibley y. County of Pine, 218L 
Siebold y. Dayia, 19. 
Silyemale y. Cole, 129. 
Simar y. Canady, 156. 
Simms y. City insaiaiioe^ 164 



^twi 



EDnOB*8 INDBX OF GASES GHEIX 



girnnui T. ETorhart, 106L 

Simms ▼. Ferrel, 157. 

Simmons ▼. Hamilton, 915. 

Simmonds ▼. Green, 374, 290. 

Simondfl y. Heard, 84a 

Simpson ▼. Carson, 855, 858. 

Simpson ▼. Oarland, 848. 

Singleton ▼. Thomas, 88. 

Sinclair ▼. Learned, 275. 

Sloan y. Union Bank Co., 8291 

Sloan y. Wilson, 67. 

Slagg y Compton, 19. 

Smaliey ▼• Oreen, 62. 

Smith y. Arnold, 58. 

Smith y. Bartholomew, 200L 

Smith y. Bittger, 278. 

Smith y. Brotherline, 841. 

Smith y. Boston & M. B. B., 185. 

Smith y. Dunham, 827. 

Smith y. Easton, 74. 

Smith y. Harrison, 288^ 

Smith y. Jordan, 284. 

Smith y. Kidd, 835. 

Smith y. Lewis, 268, 285, 292. 

Smith y. Livingston, 229. 

Smith y. Perry, 888. 

Smith y. Richards. 187. 

Smith y. Rowe, 286. 

Smith y. Sherman, 224, WL 

Smith y. Smith, 156. 

Smith y. Sublett, 848. 

Smith y. Tracy, 854. 

Smith y. Weaver, 18, 78. 

Smith y. Wood, 60. 

Smooi y. Case, 281. 

Snell y. Cottingham, 810. 

Snow y. Judson, 160. 

Snow y. Schumacher lianuf. Co., 

181. 
Snyder y. Outhrie, 80. 
Soffe y. Gallagher, 278. 
Solomon y. Elimmei, 49. 
Somen y. Pumphrey, 116, 
Soper y. Peck, 124. 
Southard y. Boyd, 184. 
Soutier y. Kellerman, 249. 
Spades v. Barrett, 164. 
Spaulding v. Rosa, 825. 
Spencer y. Towles, 212. 
Spicer y. Binker, 49. 
Spinney y. Sullivan, 224. 
St. Joseph & Denver City R. R. Co. 

y. Ryan, 184. 
St Leger's Appeal, 167. 
St Louis, etc. K'y Co. v. Davis, 83. 
St Louis, Jacksonville, etc R'y 

Co. y. Mathers, 191. 
Stackpole v. Arnold, 884. 
y. Corliss, 819. 



State y. Flndley, 19^ 

State y. Mathis. 887. 

State v. Rice, 115. 

State y. Richmond, 204. 

State v. Thatcher, 47. 

State y. Watts, 833. 

State y. Winona R. B. Ca, 29Ql 

State Bank v. Hastings, 184. 

Stafford y. Bacon, 101. 

Stafford y. Roof, 106. 

Staflford v. Welch, 275. 

Stampers v. Temple, 83. 

Stanton y. Embrey, 184. 

Starr Glass Co. y. Moray, 90. 

Steamboat Albatross y. Wayii% 

24a 
Steamboat Co. y. Atkins, 848. 
Btebbins v. Bruce, 224. 
Stebbins v. Crawford Co., 80. 
Steele v. Lowry, 46. 
Stees y. Leonard, 322. 
Stellins v. Palmer, 236. 
Stephenson v. Cody, 292. 
Stephenson v. Robinson, 818. 
Sterling Orpran Co. v. House, 91X 
Sterling y. Sinnickson, 188. 
Stevens v. Coon, 81. 
Stevens v. Warren, 180. 
Stevenson v. Crapnell, 47. 
Stewart v. Emerson, 156. 
Stewart v. Houston & Texas B. B 

Co., 224. 
Stewart v. Keteltas, 262. 
Stewart v. Lehigh Valley, 19QL 
Stewart y. Loring, 825. 
Stewart v. Rogers, 338. 
Stewart v. Hamilton College, 79. 
Stines v. Dorman, 235. 
Stockham v. Stockham, 22, 24. 
Stoddard v. Ham, 126. 
Stoddard v. Mix, 186. 
Stone V. Chamberlain, 268. 
Stone y. Covel, 169. 
Stone V. Dennison, 112. 
Stone y. Harman, 21. 
Stone V. Perry, 299. 
Story V. Solomon, 179. 
Stoutenberg v. Lybrand, 188L 
Strasser v. Conkiin, 333. 
Strauss v. Wessel, 231. 
Stroher v. Elting, 354. 
Strong V. Foote, 112. 
Strong V. Grand Tr. R. R. Cow, Mil 
Strong V. Grannis, 164. 
Strong V. Lawrence, 44. 
Stroud V. Smith, 184. 
StuOloy y. Barth, 69. 
Sullivan y. Rudisili, 327. 
Summers v. Hamilton. 88i» 



EDITOR'S INDEX OF CASES CITED. 



xlTii 



I ▼. HivtoiL 289. 
Aummen ▼. RicharaB, 156. 
Bimmer ▼. Summen, 191* 
Samner ▼. Waugh, SdC 
Baydam ▼. Jones, 282. 
Bwain ▼• Seamans, 261, 960. 
Swartoot t. Mich. Air line B. B., 

184. 
Swearingen ▼. Robertson, 818. 
Sweet ▼. Jenkins, 267. 
Sweonej r. Sweeney, 46. 
Sweeney ▼• Thomason, 240. 
Swift Inm & Steel Co. t. Dewey, 

84a 

T. 

Taintor ▼. Pendergast, 848. 
Talcott ▼. Brackett, 188. 
Talooit ▼. Henderson, 166. 
Talmage ▼. Bierhause, 846. 
Xallman ▼. Coffin, 288. 
Tallman r. Franklin, 56. 
Taylor ▼. Bemis, 184. 
Taylor ▼. Blanchard, 188. 
Taylor ▼. Cedar Rapids, 184, 
Tkylor ▼. Cottrell, 164. 
Tkylor ▼. Quest, 161. 
T^lor ▼. Merchants' Fire Int. Co., 

Taylor ▼. Pratt, 57. 

Taylor ▼. Rennie, 81. 

Taylor ▼. Ross, 57. 

Taylor y. Sandiford, 254 

Taylor t. Shelton, 849. 

Tsykr y. Taylor, 170, 212L 

Teach y. Dodson, 245. 

Teddy y. Barney, 248. 

Terrill y. Anchauer,' 204. 

Terrell y. Bennett, 159. 

Texas Land A Cattle Ca y. Carroll, 

85L 
Texas, eta B. R. Co. ▼• Roberto, 

184. 
Thallhelmer y. Brinkerhoff, 186. 
Thayer y. Daniels, 222. 
Thayer y. Rock, 190. 
Thayer y. Wilmington, 254. 
rheff ord y. Hubbard, 184. 
ThemeU y. Brackton, 246. 
Third Nat. Bank y. Harrison, 179. 
Thomas y. Dering, 18. 
Thomas y. Miles, 188. 
Thomas y. Winchester, 160i 
Thomason y. Dayton, 47. 
Thompson y. Blanchard, (77. 
Thompson y. Conoyer, sSftS. 
Thompson y. Ooild, 129. 
-^ iy.Qottld.284 



Thompeon y. Hawks, 167* 

Thompson y. Massie, 827. 

Thompeon y. Rose, 156. 

Thompeon y. Steyens, 81. 

Thompson y. Stewart, 246. 

Thornton y. Appleton, 827. 

Thornton y. Guice, 62. 

Thornton y. Sturgis, 90. 

Thorn v. Knapp, 811. 

ThraU y. Thrall, 146. 

Thurston y. Ludwig, 26ti 

Thurston y. Thornton, tt 

Tice V. Freeman, 57. 

Tingle y. Fisher, 222. 

Tippetto y. Heane, 819, 

Tisaale v. Harris, 65. 

Tobey y. Warehan Bank. 71. 

Tobey y. Wood, 107. 

Tobin y. Bass, 46. 

Todd V. Clapp, 107. 

Todd y. Stokes, 234. 

Tolmie y. Dean, 81. 

Tollen y. United States, 24t 

Tool Co. V. Norris, 184. 

Topping y. Swords, 2. 

Tower y. Divine, 836. 

Towie y. Dresser, 106. 

Towle y. Leavitt, 845. 

Town of Athens y. Thomas, 114 

Town of £agle y. Kohn, ITS. 

Town of Sharon y. Gager, 186. 

Townsend y. Cole, 157. 

Tracy y. Sackett, 170. 

Tracy y. Talmage, 192, 199. 

Traders' Bank v. Alsop, 178L 

Trevor ▼. Wood, 14, 24, 58. 

Tripp V. Brownell, 224. 

Trist y. ChUd, 184. 

Trotter y. Hechscher, 292L 

Trounstine v. Sellers, 15. 

Troutmann v. Lucas, 85. 

Troy, etc R. R Co. y. Common- 
wealth, 104. 

True y. Inter. TeL Co., 810. 

Trustees y. Lambani, 60. 

Trustees y. Walrath, 255. 

Trustees of Columbia CoUega y. 
Thatcher, 285. 

Trustees of Baptist Chmrch ▼• 
Brooklyn Fire Ins. Co., 62. 

Trustees of Hamilton College ^ 
Stewart, 72. 

Trustees of Troy Academy y. IM* 
son, 72. 

Tucker y. Bartlett, 82. 

Tucker y. Billings, 292. 

Tuck y. Downing, 156w 

Tucker y. Lawrence, 866L 

Tucker y. Morfiland, 106. 



drill 



EDITOR'S INDEX OF GASES CITED 



Tooker ▼. Wooda, 2a 

Tufti y. Plym. Gold ICixung Co., 

809. 
Tarlington ▼. Slaughter, 80l 
Turner r, Moore, 29d. 
TutUe ▼. Love, 20. 
Tjnon ▼. Doe» 202. 

V. 

Ufarich ▼. Siorer, 181. 
Underwood ▼. Campbell, 67, 
Underwood ▼. Waldron, 72. 
Un^er ▼. Boas, 178. 
Union Ins. Co. ▼. Story, 148. 
Union Nat Bank v. Roberts, 827. 
Union Refining Co. ▼. Barton, 812. 
University ▼. Finch, 104. 
United States v. Beban, 812. 
United States r. Clark, 104. 
United States v. Lane, 104. 
United States v, Tingey, 104. 
Updike y. Tenbrook, 62. 
Updike y. True, 70. 
Upton V. Tribilcock, 167. 
Unthank y. Henry County Turn- 
pike Co., 268. 
Urqubart y. Brayton, 212. 

V. 

Vail T. Phoenix Ins. Co., 148. 
Vale y. Foster, 278. 
Valentine y. Piper, 240. 
Vallett y. Parker, 17a 
Vanatta y. McEanley, 105. 
Van Bramer y. Cooper, 105. 
Vanderbilt y. Turnpike Ca, 836. 
Vanderbeck y. Vanderbeck, 260. 
Van Dusen y. Sweet, lia 
Van Dyke y. Davis, 75. 
Van Keuren v. Corkins, 224. 
Van Patten v. Beals, Ua 
Van Rensselaer v. Kearney, 47. 
Van Scotter v. Leffets, 218. 
Van Shaack v. Robbins, 204. 
Van Wyck v. Allen, 181. 
Vamey v. Conroy, 83, 811 
Vassar y. Camp, 24. 
Vaughn v. Goodman, 4a 
Vawter v. Baker, 843. 
Veal v. Fortson, 108. 
Vennum v. Gregory, 88a 
Vent v. Osgood, 105. 
Very v. Levy, 263. 
Vilas y. Downer, 106. 
Vincent y. Leland, 80L 
Vklelte T. Patten, 67. 



Viser v. Bertnmd, 18a 
Volke y. Fleming, 6a 
Voorhees v. Earl, 800. 
Vose y. Eagle Life A Health &M. 
Co., 149. 

w. 

Wabash Eiey. Ca ▼. Bank of Tb- 

ledo,290. 
Wade y. Kalbfleisch, 28a 
Wagner y. Eggleston, a 
Wailing y. Todd, 111. 
Wait v. Brewster, 27a 
Wait y. MaxweU, 116. 
Wakeman v. Wheeler, 8ia 
Waloott y. Mount, 800. 
Waldron y. Murphy, 27a 
Walker v. Burke, 46. 
Walker v. Cronin, 2ia 
Walker v. Ebert, 124. 
Walker v. France, 24a 
Walker v. Tucker, 821 
WaU V, Schnider, 179. 
Wall V. Wisconsin CranK Cfo., Oa 
Wallace v. Harris, 16a 
Wallace v. Lawyer, 83a 
Wallace v. Lent, 155. 
Wallace v. Rappleye, 187. 
Walsh y. Lennon, 278. 
Walsh v. Morse, 139, ISa 
Wallpole V. Bridges, 167. 
Ward y. Blackwood, 224. 
Ward v. Morrison, 222. 
Ward y. Vance, 113, 321 
Warder v. Fisher, 300. 
Ware v. Curry, 190. 
Ware v. Morgan, 75. 
Ware v. Westfall, 825. 
Warner v. Martin, 843. 
Warnock v. Davis, 180. 
Warren v. Hodge, 8a 
Warren y. Lynch, 4a 
Washburn v. Fletcher, 21 
Washington Mills Mfg. Oow ▼. Wa^^ 

mouth Ins. Co., 14S. 
Waters v. Bean, 100. 
Waterman v. Waterman, Ta 
Watkins v. Baird, 161 
Watkins v. DeArmand, 83a 
Watson y. Union Iron A Steel Cfo., 

841. 
Watts y. Ainsworth, 5a 
Watts y. Camors, 251 
Watts y. French, 82. 
Waydell v. Luer, 26a 
Wayland Univ. y. Boorlaadt 11<^ 
Webber v. DonncDy, 18a 
Webstar y. Gray, 61 



EDITOB'S INDEX OF CASES CITED. 



r T. Wray, 88S. 
Webstar ▼. ZieUy, 6S. 
Weeks ▼. HiU, 188. 
West ▼. Moore, 118. 
Wefanun r. Kahn, 7S. 
Weidner t. PbillipB, 160L 
Welch ▼• Bunch, 106. 
Welch V. Goodwin, 8681 
Welch ▼. Ocesler, 293. 
Welch ▼• Marrin, 59, 06. 
Welle T. Colman, 824. 
Wells ▼. Seixas, lOa 
Wells ▼. Waterhonse, 161. 
Weld ▼. Nichols, 284. 
Wellington r. Downer 

Oa Co., 160. 
Wendell ▼. Hudson, 09. 
Wenden r. Woodruff, 80. 
Woidlenger ▼. Smith, 47. 
Weasel ▼. Glenn, 827. 
West Bepub. Mining Co. t. Jones, 

800. 
Western Union TeL Co. ▼. Bains^ 

845. 
Wetmore ▼• Mell, 14 
Whalej T. Hinchman, 58L 
Wheaton ▼. Anslej, 180. 
Wheaton t. Wheaton, 107. 
Wheeler t. NeTins, 888. 
Wheeler ▼. Beed, 861. 
Wheeler t. Spencer, 170. 
Whitbeok ▼. Van Ness, 871 
Whitbeok ▼. Wayne, 820^ 
White ▼. Boyce, 248. 
White ▼. Bubs, 192. 
White T. Chouteau, 847. 
White ▼. Corlies, 2, 15. 
White ▼. Franklin Bank, 199L 
White ▼• Madison, 188. 
White ▼. Miller, 181, 800, 812L 
White ▼. Prentiss, 222. 
Whitehead ▼. Potter, 84a 
Whitehill ▼. Wilson, 4a. 
Whiteside ▼. Hunt, 179. 
Whitewell ▼. Emory, 44 
Whitfield T. LeTy, 256. 
Whiting ▼. Hesley, 268L 
WhilingT.Ohlert,01. 
Whitney Arms Co. ▼. Barlow, 110. 
Whitney ▼. Boardman, 156. 
Whitney ▼. Chambers, 819. 
Whitney ▼. Goin, 278. 
Whitney ▼. Snyder, 124. 
Whipple T. Parker. 02. 
Whitsett ▼. Clayton, 80. 
Whitsett ▼. ^re-emption Pres. 

Church, 72. 
Whittemore ▼. Wentworth^ 00. 
Whittier ▼. Dana, 209. 



Widoe ▼. Webb, 191. 
Wightman ▼. Coates, 79L 
Wiggin ▼. Goodwin, 269. 
Wilcox ▼. Wood, 248. 
Wiley ▼. Baumgartner, 188L 
Wiley V. Boberts, 57. 
Wilder ▼. Fessenden, 201 
WUder ▼. Weekly, 116. 
Wilkinson t. Heavenrich, OB, 71. 
Wilkinson ▼• Tousley, 170. 
Wilkinson ▼. Williamson, tHi 
Williams ▼. Getty, 845. 
Williams T. Hathaway, 198. 
Williams ▼. Higgins, 47. 
Williams ▼. Mitchell, 846. 
WiUiams ▼. Bobbins, 858. 
Williams ▼. Schurtz, 40. 
Williams r. Speer, 150. 
Williams ▼. StoU, 124. 
William ▼. Tiedman, 179. 
Williamson r. Bailey, 192. 
Williamson ▼. Chicago, B. L tlob 

B.B.,184. 
Willing v. Peters, 101. 
Willing V. Sherman, 279. 
Willis T. Bellamy, 848. 
Wilmington v. Kitchen, 827t 
Wilson T. Burr, 105. 
Wilson ▼. Edmunds, 92, 98L 
Wilson ▼, Force, 278. 
Wilson T. Bay, 02. 
Wilson ▼. White, 150. 
Winchester ▼. Howard, 12Sw 
Windberryr. Koonoe, 224 
Winne y. Hammond, 840. 
Winters y. Cherry, 02. 
Wise V. Foote, 160. 
Wisner y. Bardell, 191. 
Wing y. Chase, 40, 49. 
Wine V. Wolfolk, 101. 
Wolf y. Geer, 294 
Wolf y. Howes, 826. 
Wolfv. Marsh, 284 
Wolfe y. Pugh, 864 
Wood y. Armstrong, 17111 
Wood V. Ayers, 849. 
Wood y. Dayis, 58. 
Wood y. Faut, 810. 
Wood V. Gertner, 244 
Woodruff y. Garner, 169. 
Woodbridge v. HaU, 844, 84a 
Wooden y. Shotwell, 196, 241. 
Woodman y. Dayis, 841. 
Woodman y. Se^oir, 240. 
Woodworth y. Anderson, 827. 
Woodward y. Washburn, 210. 
Woolensack v. Bribes, SU. 
Woolner v. Hill, 280. 
Worth y. Case, 70. 



EDirOB^S INDEX OF GASES GFTEa 



Worthlngton ▼. Cowl«8, 848. 
Work*8 Appeal, 164. 
Workman v. CampbaU, 184i 
Worrall ▼. Mann, 47. 
Wright T. Brown, ISA. 
Wright T. Crabba, 188. 
Wright ▼. Davenport, 800. 
Wright ▼. Graham, 104. 
Wright ▼. Meek, 188. 
Wright ▼. Rjder, 188. 
Wright ▼. Tinalej, 1881 
Wright ▼. Weeks, 57. 
Wiitw ▼. Ooit. 846b 



Wyant ▼• Lesher, 187. 
Wjle ▼. Cox, 184 

Yard t. PfeUton, 49. 
Yerkfls ▼. Orton, 23QL 
Young ▼. Dake, 61. 
Young ▼• Stevensy 116L 



ZabriakfoT. Smith, »1 
Zaoharia T. Ckxlfraj, 101 



PART I. 

INTRODUCTIOK 
THE PLACE OF CONTRACT IN JURISFBUDENCEL 

At the outset of an inquiry into the principles of the law 
of Contract it is well to state the main objects of the inquiry 
and the order in which they arise for discussion. 

Nature of ooDtract.-— The first thing to consider is the 
relation of Contract to other legal conceptions: the ascer- 
tainment of this will define, and to some extent explain, the 
subject of our inquiry. 

Its formation. — Having ascertained what a contract is, 
we next ask how it is made. What are the various elements 
needful to the Formation of a valid contract t 

Its operation. — When a contract is made it foUows to 
inquire whom it affects, or can be made to affect t What is 
the Operation of contract t 

Its interpretation. — Then we must consider the mode in 
which the Courts deal with the terms of a contract when it 
comes before them for consideration; or the rules for the 
Interpretation of contract. 

Its discbarge. — Finally, we must deal with the Discharge 
of contract, the various processes by which the contractual 
tie is unfastened and the parties remitted to the relation in 
which they stood to one another before the contract was 
made. 

And first as to the nature of Contract. 

Contract is Agreement resulting in Obligation. — Con- 
tract results from a combination of the two ideas of Agree- 
ment and Obligation. Contract is that form of agreement 
which directly contemplates and creates an Obligation: the 
contractual Obligation is that form of Obligation which 



i INTRODUCnON. Pill I 

[•2] ♦Bpringe iTom Agreement We should therefore try 
to get a distinct idea of these two conceptions, and to 
this end Savigny's analysis of them may advantageously be 
oonsidered with reference to the roles of English Law. 

§ !• Agreement 

1. Natare of Agreement,— Agreement requires for its 
existence at least two parties. There may be more than 
two, but inasmuch as Agreement is the outcome of consent- 
ing minds the idea of plurality is essential to it. 

2. The parties must have a distinct intention common to 
both.^ Doubt or Difference are incompatible with Agree- 
ment. The proposition may be illustrated thus: 

Doubt. " Will you buy my horse if I am inclined to 
sellitf" 
" Very possibly." 
Dif&rmoa. "Will you buy my horse for £601'' 

" I will give £20 for it." 
8. The parties must communicate to one another their 
oommon intention.' A secret acceptance of a proposal can- 
not constitute an agreement. For instance, A writes to X 
and offers to buy X's horse for £50. Xmakes up his mind 
to accept, but never tells A of his intention to do sa He 
oannot complain if A buys a horse elsewhere.* 

A. See dlota of Lord Blaokbimi, L. R. 8 App. Oa. 001. In the OMO of Brogden r. 
Metropolitan Railway Company in tlie House of Lords. The case Is unreported in the 
Courts below, but it appears firom the report referrsd to that Lord Coleridge, C. J^ and 
Brett, T., had, in giTing Judgment in the Common Pleas, used language suggesting that 
a mere mental consent unoommunicated to the other party might create a binding 
agreement Lords Belbome and Blackburn express their dissent from such a propoai- 
Uon, the latter very fuUy and decidedly. Savigny's System, 1 140, 4. 

^ Van YaUcenburgh ▼. Rogers, 18 Mich. 180; Wagner ▼. Egleeton, 40 
Mich. 218. Proposal and acceptance do not constitute a contract if es- 
sential matters be left for further consideration. Brown ▼. N. Y. C B. 
R. 44 N. Y. 79. 

'In White ▼. Gorlies, 46 N. Y. 467, C. wrote W., "Upon agreeing to 
finish the fitting up of offices 57 Broadway in two weeks from date, you 
can commence at onoe.** W. immediately purchased lumber for the 
w€rk and b«gan to prepare it. The next day the propositioa was ooon- 



% 1. PLACE OF CONTRACT IN JURISPRUDENCE. t 

4. The intention of the parties must refer to legal rela- 
tions.^ To use a phrase adopted by Mr. Pollock as a short 
and convenient mode of expressing the idea intended to be 
convejedy an agreement must he an act in the law; * it must 
have reference to the assumption of legal rights and duties 
as opposed to engagements of a social character* For 

the ^purposes of English law we may accept, as a test [*8] 
of this, that the intention of the parties must relate to 
^'something which is of some value in the eye of the law,^ 
something which can be assessed at a money value. 

5. The consequences of Agreement must affect the parties 
themselves. Otherwise, the verdict of a jury or the decis- 
ion of a court sitting in hanoo would satisfy the foregoing 
requisites of Agreement. 

Agreement, then, is the expression by two or more persons 
of an intention to affect the legal relations of those persons. 

Agreement a wider term than Contract. — But Agree- 
ment as thus defined seems to be a wider term than Con- 
tract It includes acts in the law of two kinds besides those 
which we ordinarily term Contracts. These are: 

(1) It may not create Obligation. — Agreements the 
effect of which is concluded so soon as the parties thereto 
have expressed their common consent. Such are Convey- 
ances and Oifts,* wherein the agreement of the parties 
effects at once a transfer of rights inrevoj and leaves no 
obligation subsisting between them. 

(2) Or may only create it remotely. — Agreements which 
create obligations incidental to transactions of a different 

A. FriDdplM o# Oontncti p. 1. 
k Hffl Y. Witooa, L. B. 8 Gh. 888. 

termanded. Held, that the acceptance was insufficient, being a mere 
menial determination, unaccompanied by any act indicating an accept- 
anoe to the other par^. Abeam ▼. Ajers, 88 Mich. 093. 

iErwinT.Erwin,25Ala.286; Topping ▼. Swords, 1 E.D. Smith (N. Y.)» 
009. Though a transaction may disclose the formula of a contract, 
itill if the whole transaction was in mere frolic and banter, no legal 
ohMgation ariMs. Keller ▼. Holderman, 11 Hioh. SiS; Annstrong t. 
]loQfaee,Add.(Pa.JSOL 



4 INTRODUCTnON. Put L 

and wider sort. These have the characteristic just alluded 
to of efiFecting their main object immediately apon the ex- 
pression of the intention of the parties; but they differ from 
simple conveyance and gift not only in creating outstand- 
ing obligations between the parties, but sometimes in pro- 
yiding for the coming into existence of other obligations, 
and those not between the original parties to the agreement 

Marriage, for instance, effects a change of statits from 
the moment the consent of the parties is expressed before a 
competent authority; at the same time it creates obligations 
between the parties which are incidental to the transaction 
and to the immediate objects of their expression of consent. 

So, too, a settlement of property in trust, for persons born 
and unborn, effects much more than the mere conveyance 
of a legal estate to the trustee; it imposes on him inci- 
[*4] dental ^obligations some of which may not come into 
existence for a long time; it creates possibilities oi 
obligation between him and persons who are not yet in exist 
enoe. These obligations are the result of Agreement Yet 
they are not Contract 

We need not pause to consider Agreements which, though 
intended to affect legal relations, fail to do so because they 
fail to satisfy some requirement of the municipal law of the 
country in which they are made. We have here to do with 
Agreements which are acts in the law. It remains to ascer^ 
tain the characteristic of Contract as distinguished from the 
forms of Agreement which we have described. 

A promise essential to contract. — We are in the habit 
of considering as the essential feature of Contract a jfn'om- 
iae by one party to another, or by two parties to one 
another, to do or forbear from doing certain specified acts. 
We are further in the habit of using the word promise to 
signify a binding promise as opposed to an offer of a prom- 
ise, or, to use the cumbrous terminology of Austin, a poUi- 
eUation.* An offer differs from a mere statement of intention 
in that it imports a willingness to be bound to the party to 



|Sl place of contract in jurispbudencb. $ 

▼horn it is made, who bj acceptance turns the offer into a 
promise. Thus if A says to X '^ I mean to sell one of my 
sheep if I can get £5 for it," there is nothing which oonld 
be tamed into an agreement; bat if A says to X^^I will 
sell yoa whichever of my sheep yoa like to take for £5," we 
have an offer, and if Xsays ^^ Agreed," there is a contract 
consisting of mataal promises which the law regards as an 
obligation. 

There are then three stages needf al to the making of that 
sort of agreement which resalts in contract There mast 
be an offer; there must be an acceptance of the offer, result* 
ing in a promise; * and the law must attach a binding force 
to the promise, so as to invest it with the character of an 
obligation. Or we may say that such an agreement consists 
in an expression of intention by one of two parties, of 
expectation by the other *wherein the law requires [*5] 
that the intention should be carried out and the expec- 
tation fulfilled according to the terms of its expression. 

Contract then differs from other forms of Agreement in 
having for its object the creation of an Obligation between 
the parties to the Agreement. 

It follows that we must consider the nature of ObligSr 
tion. 

§ 2. Obligation. 

Obligation is a legal bond whereby constraint is laid upon 
a person or group of persons to act or forbear on behalf of 
another person or group.* 

Its characteristics seem to be these: 

1. A eontroL — It consists in a control exercisable by one 
or both of two persons or groups over the conduct of the 
other. They are thus bound to one another, by a tie which 
the Roman lawyers called mncvlum juris^ untU the objects 
of the control are satisfied, when their fulfillment effects a 
BoLutio Migationis^ an unfastening of the legal bond. 

A. tt win be ihowii OB iMge Id that an offer may be of an act» and that the promin 
fiwilffiia from aooeptanoe may be made by the aooeptor. 
k8aflcny.0bLeh.l.|S»^ 



• INTBODUCnON. Ftatl. 

2. Needing two parties. — Such a relation as has been 
described necessitates two parties, and these must be definite. 

There must be two, for a man cannot be under an obliga- 
tion to himself, or even to himself in conjunction with 
others. Where a man borrowed money from a fund in 
which he and others were jointly interested, and covenanted 
to repay the money to the joint account, it was held that 
he could not be sued upon his covenant* ^* The covenant 
to my mind is senseless," said Pollock, 0. B. ^^ I do not 
know what is meant in point of law by a man paying him- 
self." 

S. The parties most be definite. — And the persons must 
be definite. A man cannot be obliged or bound to the entire 
community; his liabilities to the political society of which 
he is a member are matter of public or criminal law. Kor 
can the whole community be under an Miffotion to him: 
the correlative right on his part would be a right in rmn^ 
would constitute Property as opposed to Obligation. 
[♦6] The word Obligation has been unfortunately *used in 
this sense by Austin and Bentham as including the 
general duty, which the law imposes on all, to respect such 
rights as the law sanctions. Whether the right is to pe^ 
Bonal freedom or security, to character, or to those more 
material objects which we commonly call Property, it im- 
poses a corresponding duty on all to forbear from molesting 
the right. Such a right is a right in rem} But. it is of 
the essence of Obligation that the liabilities which it im- 
poses are imposed on definite persons, and are themselves 
definite: the rights which it creates are rights in personam. 

4. The liabilities also definite.— The liabilities of Obli- 
gation relate to definite acts or forbearances. The freedom 
of the person bound is not generally curtailed, but is limited 
in reference to some particular act or series or class of acts. 
A general control over the conduct of another would affect 
his etatiu as a free man, but Obligation, as was said by 
Savigny, is to individual freedom what servitude is to ^ 

& TwaSkan t. Lowe, 2 Bz. «05. 
k BoUABd*! JaiteiinidemM, p. 1U8. 



II. PLACE OF OONTRACr IN JUBISPBUDENGB. 7 

mUnium. One may work out the illustration thus: I am 
owner of a field; my proprietary rights are general and in- 
definite; my neighbor has a right of way over my field; 
my rights are to that extent curtailed by his, bat his rights 
are very definite and special So witii Obligation. My 
individual freedom is generally unlimited and indefinite. 
As with my field so with myself, I may do what I like with 
it so long as I do not infringe the rights of others. But if 
I contract to do work for J. by a certain time and for a 
fixed reward, my general freedom is abridged by the special 
right of J. to the performance by me of the stipulated "^ 
work, and he too is in like manner obliged to receive the 
work and pay the reward. 

^. The matter redacible to a money value. — The mat- 
ter of the obligation, the thing to be done or forborne, must 
possess or must be reducible to a pecuniary value. It must 
have some ascertainable value in order to distinguish legal 
from moral and social relations. Gratitude for a past kind- 
ness cannot be measured by any standard of value, nor can 
the annoyance or disappointment caused by the breach of 
a social engagement; and Courts of law can only 
*deal with matters to which the parties have attached [*7] 
an importance estimable by the standard of value cur- 
rent in the country in which they are. 

Obligation then is a control exercisable by definite per- 
sons over definite persons for the purpose of definite acts or 
forbearances reducible to a money value. 

We may note here the various sources of Obligation. 

Sources of Obligation. 1. Agreement. — Obligation 
may arise from Agreement. Here we find that form of 
Agreement which constitutes Contract. An offer is made 
by one, accepted by another, so that the one consents to in- 
tend, the other to expect the same thing; and the result of 
this agreement is a legal tie binding the parties to one an- 
other in respect of some future acts or forbearances. 

% Delict. — Obligation may arise from Delict.* This oc. 
onn where a primary right to forbearance has been violated ; 



i INTRODUCrnON. Ftetl 

where, for instance, a right to property, to secnrity, or U 
oharaoter has been violated by trespass, assault, or defama- 
tion.* The wrong-<loer is bound to the injured party to 
make good his breach of Duty in such manner as is required 
by law. Such an obligation is not created by the free-will 
of the parties, but springs up immediately on the occurrence 
of the wrongful act. 

8. Breach of Contract. — Obligation may arise from 
Breach of Contract. While A is under promise to X, JT 
has a right against A to the performance of his promise 
when performance becomes due, and to the Maintenance 
np to that time of the contractual relation. But if A breaks 
his promise, the right of Xto performance has been violated, 
and, even if the contract is not discharged, a new obliga- 
tion springs up, a right of Action, precisely similar in kind 
to that which arises upon a delict or breach of a Duty. 

4. Judgment. — Obligation may arise from the Judgment 
of a Court of competent jurisdiction ordering something 
to be done or forborne by one of two parties in respect of 
the other. It is an obligation of this character which is 

unfortunately styled a Contract of Record in English 
[^] Law. The phrase is unfortunate ^because it suggests 

that an obligation springs from Agreement which is 
really imposed upon the parties ab extr<i. 

5. Quasi-Contraet. — Obligation may arise from Quasi- 
Oontract. This is a convenient term for a multifarious 
class of legal relations which possess this common feature, 
that without agreement, and without delict or breach of 
duty on either side, A has paid something which X ought 
to pay, or X has received something which A ought to re- 
ceive. The law in such cases imposes a duty upon X to 
make good to A the advantage to which A is entitled; and 
in some cases of this sort, which will be dealt with later, 
the practice of pleading has assumed a promise by Xto ^ 
and so invested the relation with the semblance of coa- 
tract 

flk Bui MS HoIlAod, Jnrlipinidfliioe, 161, IMl 



tH PLACE OF CONTRACT IN ^TTBISPRUDENGK t 

6. Acts springliig from Agreement bat wider than Con- 
tract. — Lastly, Obligation may spring from Agreement and 
jet be distingaishable from Contract. Of this sort are the 
Obligations incidental to snch acts in the law as marriage 
or the creation of a trust 

It is no doubt possible that contractual obligations may 
arise incidentally to an agreement which has for its direct 
object the transfer of property. In the case of a convey- 
ance of land with covenants annexed, or the sale of a chat- 
tel with a warranty, the obligation hangs loosely to the 
conveyance or sale, and is so easily distinguishable that one 
may deal with it as a contract. But in cases of Trust or 
Marriage the agreement is far-reaching in its objects, and 
the obligations incidental to it are either contingent or at 
any rate remote from iU main purpose or immediate opera- 
tion. 

To create an obligation is the one object which the par 
ties have in view when they enter into that form of Agree- 
ment which is called Contract.^ 

'Definition of contract. — And so we are now in a [*9] 
position to attempt a definition of contract, or the re- 
sult of the concurrence of Agreement and Obligation : and 
we may say that it is an AgreemetU enforceable at lawj made 

«w Ilia pTBTto M edition I dlsciiised the rlews of Mr.'Justioe Holmes as to the fiafwn 
of tiM ooBtractual obligation, and of Prof eaeor Holland as to <t« •oy/roe; but these 
topics are better suited to a treatise on Jurisprudence than to an elementary book on 
Hm law of eontraci» and I now omit them from the text. 

Mr. Holmes regards a contract as " the taking of a risk.** He rigorously insists that a 
flsaa must be held to contemplate the ultimate legal consequences of his conduct, and 
1b ""t'^'^g a promise to bare in riew. not its performance but the payment of dam- 
ages for its breach. I cannot think It desirable to push legal analysis so far as to disre- 
gaid altogether the aspect in which men view their business transactions. At the 
same time 1 feel it diffloult to do justice to the argument of Ur. Justice Holmes within 
Om limits which I could assign to myself here. 

I may say the seme of Professor Holland's view that the law does not require oob- 
traetlng parlies to haye a common intention but only to seem to have one, that the law 
** Bkust needs regard not the wlU itMlf , but the will as expressed.** Our difference may 
be shortly stated. He holds that the law does not ask for " a union of wills ** but only 
for the phenomena of snch a union. I hold that the law does require the wills of the 
parties to be at one, but that whan men present all the phenomena of sgreement they 
are boC allowed to say that they were not sgreed. For all practical purposes our co»- 
flio^or Tlew Is fanmateriaL Holmes on O o mmo n Law, p. 100; HoUand's Jurisp m dsBei^ 
tM-IOl 



1§ INTBODncnON. Pill L 

hetwem two or marepermmsj hy iohich rights aire aeqfsired ty 
ens cr more to acts or forboafrcmioee on the pa/rt qf the other or 
othere} 

iCaiuaOo.T.Bai]roadCo.4GmftJ.(Md.)l. It may be weU f or tha 
itodent to keep in mind Gomyn's lix earMntiale to a simple oontraot: 
" 1st. A person able to contract 9d. A person able to be oomtacted 
with. 8d. A thing to be contracted for. 4th. A good and soffldent 
consideration, or quid pro quo, 6th. Clear and explicit words to express 
the contract or agreement. 0th. Hie assent of both the contracting 
parties." See Jostioe ▼. Lang, 43 N. Y. 497. 



PARTIL 

THE FOKMATION OF OONTRAOT. 

*Hatihg ascertained the particalar features of con- [^OJ 
tract as a juristic conception, the next step is toasser- 
tain how contracts are made. A part of the definition of 
contract is that it is an agreement enforceable at law: it 
follows therefore that we must try to analyze the elements 
of a contract such as the lawof England will hold to be bind 
ing between the parties to it. 

These elements appear to consist: 

Elements necessary to a yalid contract. — 1. In a distinct 
oommnnity by the parties to one another of their intention; 
in other words, in Offer and Acceptance. 

8. In the possession of one or other of the marks which 
the law requires in order that an agreement may affect the 
legal relations of the parties and be an act in the law. These 
marks are Form, and Consideration. 

8. In the Capacity of the parties to make a valid contract. 

L In the Oenuineness of the consent expressed in Offer 
and Acceptance. 

6. In the Legality of the objects which the contract pro- 
poses to effect 

Besolts of their absence. — Where all these elements co- 
exist, a Talid contract is the result: where any one of them 
is absent, the agreement is in some cases merely unenforce 
able, in some voidable at the option of one of the parties, in 
lome absolutely void. A decision on the meaning of these 
three terms will be more conveniently introduced when we 
cbaolnde the subject of the Formation of Contract 



CHAPTER L 

Offer and Aoceptano*. 

[*^11] 'Agreement mnst originate in offer and accept* 
anee. — Evsbt expression of a common intention arrived 
at by two or more parties is ultimately reducible to question 
and answer. In speculative matters this would take the form, 
^ Do you think so and sol " ^' I do." In practical matters 
and for the purpose of creating obligations it may be repre- 
sented as, " Will you do so and sol " " I will." If A and 
X agree that A shall purchase from X a property worth 
££0,000, we can trace the process to a moment at which JC 
sayi to A "Will you give me £60,000 for my property!" 
and A replies " I wilL" If A takes a sixpenny book from 
JTb book-stall the process may be represented thus: X in 
displaying his wares says in act though not in word, "Will 
you buy my goods at my price!" and Ay taking the book 
with X's cognizance, virtually says " I wilL" And so the 
law is laid down by Blackstone.* " If I take up wares from 
a tradesman without any agreement of price, the law con- 
cludes that I contracted to pay their real value." * 

For the making of a contract, or voluntary obligation, 
this expression of a common intention must arise from an 
offer made by one party to another who accepts the ofiFer 
made, with the result that one or both are bound by a 
promise or obligatory expression of intention. Let us now 
see what forms this process of offer and acceptance may 
assume. 

a, BlAcksUme'i Oomm. bk. S, a 80. 

ft. Mr. PoUock in the third edition vf his **Prinelplet of Oontnel.*' pi>. 4, B, mcBMli 
that there are modee of forming agreement otherwiie than by question and answer. 
▲ diacuMlon on this point, eren If profitable in ItMlf , would be out of plaoe In tiM 
pr e w t treatise. But I still think that question and tamwm, tai hamwwm ^'^|r**ir* a 
lom, are the inavitahla mode of coming to i 



Cbmp. h OFFER AND AOCEPTANCEL 18 

*How offer and acceptance mnst be made.— The [*13] 
■imi^est and most obvious form of offer and accept- 
ance is applicable in English law only to such contracts as 
are made under seal For in English law no promise, which 
is not under seal, is binding unless the promisor obtains 
some benefit in return for his promise, and this benefit is 
called ** Consideration." 

Bearing this necessity in mind, we may say that proposal 
may assume two forms, the offer of a promise, and the offer 
of an act Acceptance may assume three forms, simple 
assent, the giving of a promise, or the doing of an act. 

And thus a contract may originate in one of four ways. 

1. In the offer of a promise and its acceptance by simple 
assent: this, in English law, applies only to contracts under 
seaL 

2. In the offer of an act for a promise; as if a man offers 
services which when accepted bind the acceptor to reward 
him for them. 

8. In the offer of a promise for an act; as when a man 
offers a reward for the doing of a certain thing, which 
being done he is bound to make good his promise to the 
doer. 

4 In the offer of a promise for a promise, in which case^ 
when the offer is accepted by the giving of the promise, tho 
contract consists in outstanding obligations on both sidea 

Some simple illustrations will explain these forms of pro 
posal and acceptance. 

lUnstrations. — 1. A promises X under seal that he wil 
do a certain act or pay a certain sum. When X has as 
Bented to the proposal both are bound, and there is a con- 
tract. Till he has assented there is an offer, which, as wiU 
be noted presently, is irrevocable so far as J. is concerned, 
owing to the particular form in which it was made, though 
it cannot bind X until he has assented to it. For a man 
cannot be forced to accept a benefit.* 



cSMMtlili pQtetXMOST.WIokli«n,L.&SH.L.M; TowBMT.11otall,tBL A 



U FORMATION OF CONTEACT. f*tetIL 

2. A man gets into a pnblio omnibus at one end of Oif ord 
Street and is carried to the other. The presence of the om- 
nibus is a constant offer bj its proprietors of such services 

upon certain terms ; they offer an act for a promise ; and 

[*13] *the man who accepts these services promises by his 

acceptance to pay the fare at the end of the journey. 

3. A man who loses his dog offers by advertisement a 
reward of £5 to any one who will bring the dog safe home; 
he offers a promise for an act; and when X brings the dog 
safe home the act is done and the promise becomes bind 
ing. 

4. A offers Xto pay him a certain sum o% money on a 
future day if X will promise to perform certain services for 
him before that day. When X makes the promise asked 
for he accepts the promise offered, and both parties are 
bound, the one to do the work, the other to allow him to 
do it and to make the payment. 

Difference between contracts on execated and exeen- 
tory considerations.* — It will be observed that cases 2 and 
3 differ from 4 in an important respect. In 2 and 3 the 
contract is formed by one party to it doing all that he can 
be required to do under the contract. It is performance on 
one side which makes obligatory the promise of the other; 
the outstanding obligation is all one side. In 4 each party 
is bound to some act or forbearance which, at the time of 
ente^ng into the contract, is future: there is an outstand- 
ing obligation on each side. 

Where the benefit, in contemplation of which the prom- 



<k Hm word! tMtntUd and taatcvA^ifni are used in throe different lenMS li 
Oontnct, Aooordloff to tlie lubstantiTe with which the Adjecttve ie Joined. 

Szeeated eoiuiderotion as oppoied to eceoiitory meant jirewnf ( 
^hire, an act ae opposed to a promiML 

Szeeated amfrad means a oontract performed whoUj ea one side, while ss soDse*- 
toiy oontraot Is one which Is either whoUy onperf ormed or In which there vsnates 
something to be done on both sides. 

Executed oonfroct o/sole means a har^it^ and sole which has passed the lamwit f 
in the thing sold, while executory contracts of sale are contracts as opposed to coaveif^ 
aaces, and create rights in penoniun to a fulflUmeut ot their terms Instead of rights <■ 
rwm to an enjoyment of the property passed. 

Leake ca Contract, p. US; Packer, B., In roelsr ▼. Diawbsr, • ] 
SB Sales, p. tf7. 



OMip. 1 1 L OFFER AND AOCEFTANGB. 1» 

ise 18 made, is done at the same time that the promise aoqnirei 
a binding force; where it ig the doing of the act which 
oondndes the contract; then the act so done is called an 
eaoeeuted or present consideration for the promise. 
Where *a promise is given for a promise, each form- [*14] 
ing the consideration for the other, such a considera* 
tion is said to be executory or future. 

We may now lay down briefly the rules which govern 
Offer and Acceptance, or the communication of the com- 
mon intention to create an obligation. 

§ 1. An Offer cr its Aoeeptanee or bath may be oommunir 
cated either by words or by conduct^ bvi it is essential 
to their operation that they shovld be oommunioated. 

Contraet may arise firom condact. — From what has 
been said as to the possible forms of offer and acceptance it 
will have been seen that conduct may take the place of 
written or spoken words in the making of contracts. 

If A ask X to work for him for hire, X may accept 
simply by doing the work, unless ^ in his offer prescribed 
any form of acceptance. 

Or, again, if A allows Xto work for him under such dt- 
eomstances that no reasonable man would suppose that JC 

iHoDghwoat T. Boiaaubien, 18 N. J. Eq. 816; New York R. R. Oa ▼. 
Fijdef. 19 Burb. (N. Y.) 428; Wetmore ▼. MeU, 1 Ohio St 28. 

Orders for foods.— An order for goods does not amount to a con- 
tract QntQ ■ome act is done on the faith of it, by the person to whom it 
is giTon, or nntil it is aooepted, and if above $00, the aooeptanoe must 
be in writing, GoodspeedT. Waird Plow Go. 46 Mich. 822; but» as arule, 
orden for the deliTery of personal property do not require any aooept- 
anoe other than that indicated by delivery of the proper^. Briggs t. 
Siaer, 80 N. Y. 662; Dent ▼. Steamship Co. 48 N. Y. 890. And when 
goods are ordered by maO an acceptance of the order by shipping the 
goods oompletesthe contract. Crook ▼, Cowan, 64 N. C. 748; Beardsly 
T. Davis, 62 Barb. 160. Acceptance may be communicated in various 
ways, as by mail or telegraph, or by special messenger. Howard v. 
Daly, 61 N. Y. 862; Fox v. Turner, 1 Brad. (DL App.) 168; Sohonborg 
T. ClMiiey,611ioitti^fta(M.Y.)800;DtthLev. Batls,88Tez.812;Tke- 
WT.Wood,•6N•Y.807• 



It FORMATION OF CONTRACT. Pint £L 

meant to do the work for nothing, A will be liable to pay 
for it* The doing of the work ia the offer, the permission 
to do it or the acquiescence in its being done is the accept- 
ance. 

On the same principle, if A sends goods to X's house and 
X accepts or uses the goods, X will be liable on an implied 
contract to pay what the goods are worth.^ The offer is 
made by sending the goods, the acceptance by their use or 
consumption, which is in fact a promise to pay their price. 
And this rule has been applied to a case where there has 
been a verbal offer and acceptance invalid for want of com- 
pliance with the requirements of the Statute of Frauds. A 
part performance of such an agreement has been held to 
create a binding contract to pay for so much as has been 
accepted of the performance.* The original agreement is 
invalid; the performance under it creates a fresh offer, the 
acquiescence in such performance a fresh acceptance 
[♦15] to the extent of the *performanco. Thus a. new and 
binding contract takes the place of the first invalid 
agreement. 

But there must be communication of the acts relied 
on. — But in aU these cases there must be communication 
alike of offer and acceptance, and where conduct is relied 
upon as constituting acceptance it^must be something more 
than mere silence, it must be silence undei such circum- 
stances as to amount to acquiescence.^ 

a. Pajnter t. WlUlamt, 1 a A M. 810; Leake, p. 87. 
h, HartT. HlllB, 16 M. A W. 87. 
c Maror t. Fyne, 8 Bins, at i». 888. 

^ Ab the author sabeequently explains, it is not neoeesarj that the ao- 
oeptance be communicated to the proposer. Whatever amounts to the 
manifestation of a formed determination to accept an offer, oommimi- 
Gated, or put in proper way to be communicated, to the partj making 
the offer, is an acceptance which wiU dose the bargain. Mactier t. 
Frith, 6 Wend. 108. The conduct relied upon as constituting an accept- 
ance most be a step in the direction of notifying the proposer that hia 
offer is accepted or there is no contract Beckwith ▼. GheeTer, SI N. H, 
(1 Fost.) 41 ; McDonald ▼. Boeing, 48 Mich. 804; White t. Oorlies .V 
T. 487; TroQsUne ▼. SeUets, 85 Kan. 447. 



Omi^ L S t OFFER AND ACCEPTANCE. 17 

Silence does not giye consent^ where oflTer is not com- 
mnnlcated. — It is impossible that such a.cqaiescence can be 
presumed from silence where the offer is not communicated 
to the party to whom it is intended to be made. In the 
case of Taylor v. Laird^ the plaintiff, who had been en- 
gaged to command the defendant's ship, threw up his com- 
mand in the course of the expedition bat helped to work the 
vessel home, and then claimed reward for services thus renr 
dered. It was held that he could not recover. Evidence 
** of a recognition or acceptance of services may be sufBcient 
to show an applied contract to pay for them, if at the time 
the defendant had power to accept or refuse the eervicee.^^ But 
in this case the defendant never had the option of accepting 
or refusing the services while they were being rendered, and 
did in fact repudiate them when he became aware of them. 
The plaintiff's offer, being uncommunicated, did not admit 
of acceptance, and could give him no rights against the 
party to whom it was addressed. 

Where acceptance is not communicated.— Nor can an 
acceptance, which does not go beyond an uncommunicated 
mental determination, create a binding contract either by 
reason of any form in which the offer is framed or because 
the intention to accept did in fact exist.^ 

A offered by letter to buy X's horse for £30 15«., adding, 
'^ if I bear no more about him I consider the horse is mine 
at £30 15«.'' No answer was returned to the letter/ and it 
was held that there was no contract, though it appeared that 
Xhad made up his mind to accept the sum offered. A per- 
son making an offer may, as will appear, prescribe a form of 
acceptance,^ but he may not turn the absence of communi- 

a. fSL. J. EX.S39. 

•. PetthoaaeT. Bindl^j, 11 a & N. a 80a. 

& See postk pw SL 

1 But it is said that a proposal may be made under such circumstanoes 
as not to caU for a communication of acceptance. Fry v. Franklin Int. 
Oo. 40 Ohio St. 106; Caton ▼. Shaw, 2 H. & O. (Md.) 14. As where a 
proposal Is made by letter, and the letter does not, by necessary impUca- 
tion under aU the dioomstanoes, oaU for a reply in case of aooeptanoa. 
% 



10 FOBMATION OF CX)NTBACrr. PMIL 

cation into an acceptance, and compel the recipient of 
[*16] his *offer to refuse it at peril of being constmed to 
have accepted it. 

In a case of the reign of Edward IT. it was argued that 
where the produce of a field was offered to a man at a cer- 
tain price if he was pleased with it on inspection, the contract 
was concluded and the property passed when he had seen 
and approved of the matter of the sale.* But Brian, 0. J., 
said, ^' It seems to me the plea is not good without showing 
that he had certified the other of his pleasure; for it ^ trite 
learning that the thought of man is not triable, for the devil 
himself knows not the thought of man ; but if you had agreed 
that if the bargain pleased you then you should signify it to 
such an one, then I grant you need not have done more, for 
it is matter of fact." 

Terms uncommunicated, the contraet being otherwise 
complete. — And the rule thus laid down admits of further 
illustration in the case of offers which consist of various 
terms. If an offer contains on its face the terms of a com- 
plete contract, the acceptor will not be bound by any other 
terms intended to be included in it; unless it appear that he 
knew of those terms, or had their existence brought to his 
knowledge and was capable of informing himself of their 
nature. Cases which illustrate this rule arise when a con- 
tract has been made with a railway company for the safe 
carriage of the plaintiff, or of his luggage ; or for the deposit 
or bailment of luggage in a cloak-room; or, as in the last 
reported case on the subject, where a contract has been 
made for the deposit of an article and for its sale uponcom- 
mission« In each case the document or ticket delivered to 
the plaintiff contained terms modifying the liability of the 
defendant, the offerer, as carrier or bailee: in each case the 
plaintiff, the acceptor, alleged that the terms were not 
brought to his notice so as to form part of the offer which 
he accepted. 

The law applicable to these cases is thus laid down by 

«. TMrBook.17Bd.IV. 1: Blaokbura oa SaIm. IW; ▲jv. 0». ^ fllL 



Ghi^LSt OFESB A10> AOCEPTANGE; !• 

Mellish, L. J. : ^ If the person receiving the ticket did not see 
or know that there was any writing on the ticket, he is not 
bonnd by the conditions; if he knew there was writing, and 
knew or believed that the writing contained condi- 
tionSyihen *he is bound by the conditions; if he knew [*17] 
there was writing on the ticket bat did not know or 
believe that the writing contained conditions, nevertheless 
be would be bound, if the delivering to him of the ticket in 
such a manner that he could see there was writing upon it, 
was, in the opinion of the jury, reasonable notice that the 
writing contained conditions.* 

Terms known to exist. — An illustration of the first case 
18 npplied by Henderson v. Stevenson.^ The plaintiff pur- 
chased of the defendant Company a tncket by steamer from 
Dublin to Whitehaven. On the face of the ticket were these 
words only, ^'Dublin to Whitehaven;" on the back was an 
intimation that the Company incurred no liability for loss, 
injury or delay to the passenger or his luggage. The vessel 
was wrecked by the fault of the Company's servants and 
the plaintiff's luggage lost. The House of Lords decided 
that the Company was liable to make good the loss, since 
the ticket was a complete contract upon the face of it, and 
that the plaintiff could not be held to have assented to a 
term ^^ which he has not seen, of which he knows nothing, 
and which is not in any way ostensibly connected with that 
which is printed or written upon the face of the contract 
presented to him." 

Terms known to exist but not read.— Ha/rrie v. O. W. 
Baikoay Company^ is an illustration of the second of these 
cases. The plaintiff deposited luggage in the cloak-room of 
the defendant Company and received a ticket having writ- 
ten on its face, among other words, ^' subject to the condi- 
tions on the other side." Olie of these conditions limited 
the liability of the Company to £5 for each package. The 

a. Futar ▼. a E. Raflwmj Co. i 0. P. D. Ml 
». I.. & i H. I.. So. App. 490. 



\ 



m FOaBCATlON OF OONTRACr. I 

s 

InggAgo was lost, and the plaintiff sought to get ^$ 
ftt a higher rate than that fixed by the condition I: 
mitted a knowledge that the ticket contained so: 
bions, bat he had not read thenL He was held to I 
by thenL 

Matter of terms uncertain. — Park&r v. South 
Railway Company* was a like case of deposit of 
in a cloak-room on terms contained in a ticket 1 
ditions limiting the liability of the Company were 
on the back of the ticket and were referred to by th« 

"See back" on the face of the ticket The p 
[*18] *while he admitted a knowledge that there w 

ing on the ticket, denied all knowledge that t] 
ing contained conditions. His position thus differc 
that of the plaintiff in the case above cited, who km 
there was a condition, but did not know its purpc 
was held by the Court of Appeal that he was bound 
condition if a jury was of opinion that the ticket am 
to a reasonable notice of its existence. 

But in all these cases the question is the same. Ha. ^ 
terms of the offer been fully communicated to the acc| ; : 
And the tendency of judicial decision is towards a g| j ^ 
rule, that if a man accepts a document which purpc i * , | 
contain the terms of an offer, he is bound by all the | : : ; 
though he may not choose to inform himself of their ^ Lor 
or even of their existence.^ 

Exception in case of offer under seal. — There is one ex- 
ception to the inoperative character of an uncommunicated 
offer; this is the case of an offer under seal Yet the posi- 
tion of the party making such an offer is, not that be is 
bound by contract, for this can only be when an offer is 
accepted, but, that he has made an offer which he cannot 
withdraw ; and so the matter is best dealt with under the 
head of the revocation of offers. 



M 

3 i « : 21 



•. tap.D.4ie. 

k Butte ▼. & & BaSwiij Oo. ft a p. D. 1; WatktM v. Phalli, lOQ. B. A. tm 



OFFER AND AOCEPTANCE. 

i9r must he mtencUd to oreaUf and capaNe qf 
creatmgj legal reUUiona. 

be intehded to create legal relations. — in 

Dffer may be made binding by acceptance, it 

) in contemplation of legal consequences *, a 

it of intention made in the course of conversa- 

constitute a binding promise, though it be 

7 the party to whom it was made.* Thus in 

'eek V. Tibold^ the defendant told the plaintiff 

. give £100 to him who married his daughter 

;ent. Plaintiff married defendant's daughter 

3nt, and afterwards claimed the fulfillment of 



reements. — A proposal for a oontraot, to be reduced to 
)d, is not binding upon either party until the agreement 
d to writing and signed. The Governor v. Fetch, 88 EL 
cDonald v. Bewick, 51 Mich. 79; Bourne ▼. Shapleigh, % 
1 nothing remains, hoi^ever, but. to reduce the contract 
irding to terms explicitly agreed upon, it may be imnm- 
as not been done, unless it appears that the parties in- 
to bound until their agreement was reduced to writing. 
Hoke, 14 Ohio St. 296; Eads ▼. Carondelet, 43 Ma 118; 
ing, 15 £. Ch. R. 729; MorriU v. Tehama, 10 Nev. 125; 
as, 10 Mo. App. 106; Commissioners v. Rlioades, 26 Ohio 
^ 4U. ^_ aquiry is whether the parties have finally assented to the 
teniB of a contract, and simply provided that such terms shall be evi- 
dsDoed by a writing to be drawn up, or whether they have only agreed 
to make a contract which shaU not bind them until reduced to writing 
and signed. Pomeroy on Cont. sec. 62. 

BosliM^ss circulars.^ '*Care should always be taken not to construe 
as an agreement, letters which the parties intend only as preliminary 
negotiations." Foster, J., in Lyman v. Robinson, 14 Allen, 254. Busi- 
oefls drcolars, stating terms upon which goods may be ordered ^ sent to 
penoDB to attract their attention to a particular busmess, are not offers 
which become binding contracts on their acceptance by the persons 
addressed, Moulton v. Kershaw, 59 Wis. 816; 48 Am. R. 516; Knight 
▼. Oooley, 84 la. 218; Beaupre ▼. P. A A. TeL Co. 21 Minn. 155. See 
Smith ▼. WeaTer, 90 DL 892; The Chicago, eta R. IL Ca v. Dane, 48 N. 
Y. 240; Unooln t. Erie Preserying Co. 132 Mass. 129; Howard ▼. Indu» 
trial School. 78 Ma. 280. But see EeUer ▼. Ybarru, 8 OO. 147. 



tl FORMATION OF OONTRACT. Pttrt IL 

the promise and brought an action npon it. It was held not 
to be reasonable that a man '^ should be bound by general 

words spoken to excite suitors." 
[*19J *0n a like footing stand engagements of pleasure^ 

or agreements which from their nature do not admit 
of being regarded as business transactions. We cannot in 
all cases decline to regard such engagements as contracts on 
the ground that they are not reducible to a money valua 
The acceptance of an invitation to dinner or to play in a 
cricket match forms an agreement in which the parties may 
incur expense in the fulfillment of their mutual promises. 
The damages resulting from breach might be ascertainable, 
but the Courts would probably hold that, as no legal conse- 
quences were contemplated by the parties, no action would lie. 
And capable of creating them. — And a proposal must 
be capable of affecting legal relations, that is to say it must 
Qot be so indefinite or illusory as to make it hard to say 
what it was that was promised. Thus where A bought a 
horse from Xand promised that " if the horse was lucky to 
him he would give £5 more or the buying of another horse," 
it was held that such a promise was too loose and vague to 
be considered in a court of law.' 

And so where A agreed with Xto do certam services for 
such remuneration as should be deemed right, it was held 
that there was no promise on the part of X which was suf- 
ficiently definite to be capable of enforcement. " It seems 
to me," said one of the judges, ^' to be merely an engage- 
ment of honour." * 

§ S. Acceptance must he absolute^ and identical tffith the 
terms of the offer} 

Acceptance must be absolute.— Unless this is so the in- 
ntion expressed by one of the parties is either doubtful in 

a. Outhlng ▼. Lynn, t B. A Ad. 289: 
5. Tajlor ▼. Brewer, 1 M. ft S. 290. 

I An aooeptance to be good must in every respect meet »nd oorrespond 
with the offer, neither falling within or fcoing boyond the terms pro- 



Lit. OFFER AND AOCEPTANGB. tl 

ttsolf or difiarent from that of the other. If A offers to X 
to do a definite thing and X accepts conditionally, or intro- 
dooes a new term into the acceptance, bis answer is either a 
m«re expression of willingness to treat, or it is in effect a 
oonnter^proposaL 

A proposed to sell a property to X, X accepted ^' subject 
to tlie terms of a contract being arranged" between his 
solidtor and J.'s * Here it was held that there was 
no agreement, for *the acceptance was final, but snb- [*20] 
jeot to a discussion to take place between the agents 
of the parties. 

And identical with the terms of the proposal. — A pro- 
posed to sell a farm to X for £1,000 ; X said he would give 
£950.^ A refused this offer, and then X said that he was 
willing to gire £1,000. A was no longer ready to adhere 
to his original proposal and X endeavored to obtain specific 
performance of the alleged contract. But it was held that 
his offer to buy at £950 in answer to J.'s offer to sell for 
£1,000 WBA a refusal of the offer of A and a counter-pro- 



iT.]fUT7Bl»6H.L.aiia 
». HjdeT.WniMh,tBMT.881 



p oaady bal ezaotij meetmg them at aU points and closing with them 
]wt M tbgj stand. Polls t. Whitehead, 98 N. J. Eq. 612; Fox t. 
Tamsr, 1 Brad w. (Dl.) 168; Slagg t. Gumpton, 81 Ind. 171; Bruner 
T. Wbeaton, 40 Mo. 863; Eads ▼. Carondelet, 42 Ma 118; Eliason ▼. 
Henshaw, 4 Wheat 226; Brace t. Bishop, 48 Yt. 161. A conditional 
aooeplanoe is a new proposal which must be accepted in order to bind 
the partiea. Briggs ▼. SijBer» 80 N. Y. 647; Borland ▼. Ouffj, 1 Grant 
(F!a.) Oaa. 824. An acceptance by letter was held sufficient, though it 
contained an inquiry as to how remittance ehould be made in Clark t. 
Daleap 20 Barb. 42. See Cammeyer t. United German Churches, 2 
Sandf . Ch. 244. When land is offered for sale by letter, an acceptance 
specifying that payment is to be made at the place of the purchaser's 
leridiinai Is not unconditional, as the terms of the offer entitle the 
vendor to payment at his own place of residence. Baker t. Holt, 66 
Wis. 100; Sawyer t. Brossart, 67 Iowa, 678; Northwestern Iron Co. t. 
Meadflb 21 Wis. 474; GQbert ▼. Baxter, 82 N. W. R. ffowa) 864; May- 
naid T. Tabor, 68 Ma. 611; Fanno t. Westi n, 81 Yt. 846; SieboLd t. 
Da^K 67 la. 66QL 



M FOBMATION OF OOJSTTBJLOr. Put n. 

posal, and that he oould not after this hold A to his original 
offer.* 

It is otherwise where the parties agree in terms but differ 
in their construction of the terms. Where the difference is 
one of degree, where the parties meant the same thing ap 
to a certain point, the contract has in such a case been held 
good so far as the parties were mutually agreed. In Preston 
V. Lack^ the defendant offered to sell his ^' English patent," 
the plaintiff accepted the offer believing it to include all the 
defendant's patents, and the contract was held good as re- 
garded the English patent 

S 4. An offer unaccepted creates no rigJUe^ hut may he 
revoked or lapse hefore €U}cq>tanoe. 

Offer may be determined. — From what has been already 
said it will be understood that acceptance, for our purposes, 
can only mean communicated acceptance: it follows, there- 
fore, that an offer, unaccepted, cannot constitute agreement 
or bind the party making it to the party to whom it is 
made.' Since, however, an offer is liable to be turned into 
a contract by acceptance, therein differing from a mere 
statement of intention, it is important to know how this 
Uability can be terminated. 

«. l7Cai.D. 1981 

1 Fexmera ▼. Mt. Hope Iron Co. 68 Me. SO ; NoHhwestem Iron Oo. t. 
Meade, 21 Wis. 474; Carr t. Duval, 14 Pet 77: Ck>niweUB ▼. Krengel, 41 
DL 894; Johnson ▼. Stephenson, S6 Mich. 68; %gleston t. Wagner, 46 
Mich. 610; Derrick ▼. Monette, 78 Ala. 76; EUason t. Henahaw, 4 
Wheat. 228. " A proposal to accept, or acceptance upon terms yarying 
from those offered, is a rejection of the offer.** National Bank ▼• HaU, 
101 U. a 60; Clay v. Ricketts, 66 Iowa, 862. 

* Tattle ▼. Love, 7 Johns. 470; Demoas t. Noble, 6 Iowa, 680; Bowen 
▼. Blessing, 8 Serg. & R. 243; Dehar ▼. Fosdick, 1 Woods, S86; R A L. 
M. R. R. Co. ▼. Unity, 62 Me. 148; National Bank ▼. HaU, 101 U. & 48; 
Waiden ▼. Woodruff, 88 Mich. 180. 



L S 4 OFFER AND AOCEFT ANGB. » 

(a) Vj reroeation* — An offer may be revoked before ao- 
oeptance.^ We may lay down this rule generally, subject 
to an exception in the case of offers made under seal But 
the mles relating to revocation depend to some extent upon 
those which determine the moment when acceptance be- 
csomes binding. We wiU therefore postpone their consider- 
ation for a while. 

*(J) By efflux of prescribed time.— An offer may [♦2X] 
lapse by the efflux of a specified time for acceptance.^ 
An offer to sell goods ^receiving your answer in course of 
post" would lapse on failure to accept in course of — i. e. 
by return of — post, and a subsequent acceptance would 
be inoperative. 

This is the true construction of promises to keep an offer 
open for a given number of hours, days, or weeks. Such a 
promise is not binding for want of consideration. It could 
only become binding if the party making the offer were to 
get some benefit by keeping it open, such as a higher price 
or better terms in the event of acceptance.* 

A may say to X, ^^If I have to make up my mind now, 

•.OookT. Oztaj, ST. a. 6611 

^Quick T. Wheeler, 78 N. Y. 80Q. Where proposal is tOBereralitmaj 
be teroked at an j time before acceptance bj all to whom it is made. 
Burton t. Shotwell, 18 Bush (Ky.), 271. 

sPottB T. Whitehead, 20 N. J. Eq. 50; Longworth v. MitcheU, 26 Ohio 
St. 842; Britton t, Phillip, 24 How. Pr. 111. A proposal calling for an 
aooeptance *' hy return maU " gives a reasonable time for acceptance ; as 
where an acceptance was mailed on same day proposal was received, 
bat not by tint retnm mail, it was held sufficient (Palmer t. Phoenix 
life Ins. Co. 84 N. T. 68); but in such cases prompt action is required, 
and a delay of four days has been held unreasonable. Taylor t. Bennie, 
S6 Barik 272. An immediate reply is required by implication, and the 
ezpreasion "by return post," as a rule, adds little to the proposal. Dun- 
lop T. Higgfau, 1 H. L. Gas. 887; Maday v. Harvey, 90 BL 628. In 
Maday v. Harvey the offer was received by mail on evening of liarofa 
SM, and caUed for an answer '' by return maiL" The answer was given 
to a hay to mail on the 28d, who neglected to mail it until the 25th; 
held that the 26th was too lata, and that the boy's deUy did not •soaom 



tl lOBMATION OF OOMTBACT. FvlII. 

I must refuse to boy your horse; bat if Imay bavea week to 
deoidoi then, if I do acoept, I will give 70a £6 more than 
yon now ask." * There is authority for supposing that if Z 
assented to this offer on the part of A he would be bound 
to keep the horse out of the market for a week. 

If there be no such consideration for a promise to keep 
an offer open, the proposer is free to revoke his offer within 
the prescribed time, but in default of revocation an accept- 
ance within the limits allowed creates a binding contract* 

(0) By efflux of reasonable time.— Where the party 
making the offer has not prescribed or specified a time 
within which it may be accepted, the offer is determined by 
lapse of a reasonable time.^ What is a reasonable time 
must needs depend on the nature of the proposal The 
case which best illustrates the rule is The RamigaU Hatd 
Company «. llontefiart? The defendant offered to pur- 
chase shares by letter on the 28th of June; no communica- 
tion was made, to him until the 23d of November, when 
he was informed that shares were allotted to him. He de- 
clined to accept them, and it was held that the proposal had 
Upsed, without notice of revocation, by efflux of a reason- 
able time for acceptance. 

•.O. H. BftflwajO^ ▼. WItluua, L. E. t a P. ML 
a BoatMfVY. Oitait, 4 Bing. «! 

iGhioago R. R. Go, t. Dane, 48 N. Y. 940; McCXirdj t. Roger, SI Wit. 
197; MiseU t. Burnett, 4 Jones (N. a) U 949; liartin ▼. Black, 91 Ala. 
791; Battermaa t. Morford, 76 N. Y. S99; Ferrier ▼. Storer, 68 la. 484; 
Stone T. Hannan, 81 Minn. 619. Parol eridenoe of material facte and 
droomstanoea, known to the parties at the time, may be reoeiTed to aa- 
■let in determining what would constitute a reasonable time^ but when, 
bj the judgment of the law, a written proposition is te be acc ept ed 
within a reasonable time, parol eridenoe is not admissible te show that 
the parties agreed that the proposal should remain open for an j speoi- 
lled tima Stone ▼. Barman, 81 Minn. 619; Mactier t. Frith, 6 Wead. 
ISa The proposer maj, bj his conduct, estop himself from setting up 
that the acceptance was not sent within a reasonable time. Batterman 
▼. Morfcrd, 76 N. Y. 699. A delay of forty-eight hours has been held 
unreasonable. ATerill ▼. Hedge, 19 Oonn. 494. AU depends on the dr- 
lof thecassb 



nha^LIV OnrSB aSD AOOKFTANOa m 

(d) B7 breach of presertlied eondition.— Fajlars to oom^ 
ply with a oondition in the offer as to the mode of aocept 
anoe may also cause the offer to lapse. 

A offered to sell flour to X, tke answer to.be sent 
by *retarn of the wagon which brought the offer: [*S2] 
X sent a letter of acceptance by mail to another 
place, which was not the destination of the wagon, having 
reason to think that so bis answer would reach A more 
speedily. It was held that A was not bound by an accept 
anoe so sent* 

(4) By death of either party before aeeeptanee.— Tbt 
death of either party before acceptance causes the offer t ^ 
lapse.' An acceptance communicated to the represent! 
tives of the maker of an offer cannot bind them.' Nor oai 
the representatives of a deceased person to whom an off« 
baa been made aocept it on behalf of his estate. 

S S. Acaptanee iuma an qfer into a (Jontraet atut ii it- 

nvocabls. 

Aeeeptanee operates from moment of eommanleatioB« 
An offer, as we have seen, can be revoked before accept- 
ance. Acceptance supplies the element of agreement which 
binds the party making the offer to a fulfillment of its terms.' 
It changes the character of the offer, making it a promise; 
and it must needs be irrevocable, since if the parties are 
ever to be bound at all it must be from the moment when 
they both become aware of their common intention. 

It is therefore very important to ascertain the moment of 

• bimob t. H«Mbftw, 4 wiMAt tn. 

ifWfcbT.Lftwranoe,lBAige(N. T.X^Si. Nodoe of tiM dlsw>latkm of 
a partnenhf p rorokeB «i offer bj tha firm. Qoodcpeed t. Wsird Plow 
Ob^ 45 Ifioh. 8Sa 

* An aooeptaiioe mafled bofore bat not reodTod ontQ sfter the desib 
of the impoier makee a bioding oootract Hsctier t. FVith, S Wend. 

les. 

t IMed T. Bojrsl Iim. Oo. 00 N. T. S4S ; Thunton ▼. Thonitai, 1 i 
•Is HMBfltwi T. I^foomiiif Ine. OOi S Pik 8k Ml 



tB lOBMATION OF CX)MTaACT. Pint IL 

oommnnication; and though this is not diffloolt, except as 
a question of iact, when the contract is formed bj tjpoken 
words or conduct, difficulties have arisen and are but lately 
settled in cases where contracts are made by correspond- 
ence. 

Moment of eommnnication is moment of despatch. — 
It is now decided that the acceptance is made when the ac- 
ceptor has done all that he can to communicate his inten- 
tion. In other words, acceptance is communicated from the 
moment of its despatch.^ An acceptance once despatched 
is irrevocable, for the contract is then made. 

Cases determining moment of communication. — The 
general rule to this effect is laid down in Adams «. juind- 
sdL^ In that case the defendant offered to sell wool to the 
plaintiff by letter dated Sept. 2d, 1817. The letter was 
misdirected, and so did not reach the plaintiff till Sept 6th: 
he accepted by letter posted that evening, but the defend- 
ant had in the meantime sold the wool to others. The plaint- 
iff sued for non-delivery of the wool, and it was 
[*23] argued on ^behalf of the defendant that no contract 
could arise until the plaintiff's answer reached hiuL 
But the Court said ^Hhat if that were so no contract could 
ever be completed by the post. For if the defendants were 
not bound by their offer, when accepted by the plaintiffs, till 
the answer was received, then the plaintiffs ought not to be 
bound till after they had received the notification that the 
defendants had received their answer and assented to it. 
And so it might go on o^ injmitum. The defendants must 
hs considered in law as makingy during every instant of the 
time their letter was traveling^ the same identical offer to the 
flaintiffs; and then the contract is concluded ly the accept^ 
mice of it by the latter.^* 

The case would seem to have established that the post- 

•.l&ftAld.«8L 

iLeryv. Cohan, 4 0a. 1; FerrierT.Storer, 98 la. 484; Abbott ▼• 
•Id. 4S N. H. 14; Stookhsm ▼. Sfeookhsm, 8S Hd. 19S. 



L § & OFFER AND ACCEPTANCE. 29 

oflBoe is the agent for the party making the offer, and that 
in the language of Thesiger, L. J., in a later case, ^^ As soon 
as the letter of acceptance is delivered to the postofBce the 
contract is as complete and final and absolutely binding as 
if the acceptor had put his letter into the hands of a mes- 
senger sent by the offerer himself ob his agent to ddioer the 
qffeft and receive the cu^oeptanoe.* But there has been some 
hesitation in applying this rule in cases where the letter of 
acceptance was lost or delayed in transmission, and though 
the matter is now settled, it is worth noting the stages by 
which the present result has been attained. 

In Dunlop v. Higgi/M^^ Xx>rd Cottenham held, though it 
was not necessary to the decision of the case, that the 
posting of a letter of acceptance concluded the contract 
whatever might afterwards befall the letter. But the Oourt 
of Exchequer, in a later case,' tried hard to escape the con- 
sequences of the rule, and Kelly, 0. B., laid it down that the 
contract was not binding till the letter of acceptance was 
received, but that when it was received its operation related 
back to the moment of its posting. 

Position of parties if letter of acceptance is lost. — This 
decision was virtually overruled in Hafrrii Caee^ as to the 
moment when the contract was complete, but Mellish, L. J., 
said that though ^'complete at the time when the 
letter 'accepting the offer is posted, yet it may be [*24] 
subject to a condition subsequent that if the letter 
does not arrive in due course of post, then the parties may 
act on the assumption that the offer has not been accepted." 
But it is now settled, in the Houeehcld Fvre Ineuranoe Com- 
pany V. Orant^^ that the parties are bound, from the moment 
the letter is put in course of transmission, by a contract the 
existence of which is unaffected by the subsequent fate of the 

•. Hoowfaold Hm. Oou t. Gnut, 4 Xz. D. ttL 

i. lH.L.a8Bt 

A BKMdi-AiiMrieM TflL Otw r OolMii, L. a. • Bx. ML 

A L. & T ck. ssr. 

iL4Xz.atlC 



•0 FORMATION OF CONTRACT. Ptet Ia 

letter.^ The contract does not remain, ap to the moment 
the acceptance is received, in the state of suspended anina- 
tion contemplated by Kelly, 0. B.;* nor is it subject to the 
condition subsequent suggested by Hellish, L. J. 

The law is thus clearly stated by Thesiger, L. J.: "The 
acceptor, in posting the letter, has, to use the language of 
Lord Blackburn, ' put it out of his control and done an ex- 
traneous act which clenches the matter and shows beyond 
all doubt that each side is bound.' * How then can a casualty 
in the post, whether resulting in delay, which in commercial 
transactions is often as bad as no delivery, or in non-deliv- 
ery, unbind the parties or unmake the contract f' 
The Indian Contract Act adopts a different rule: 
Rule of Indian Code. — ''The communication of an accept- 
ance is complete as against the proposer when it is put in 
course of transmission to him, so as to be out of the power 
of the acceptor; as against the acceptor, when it comes 
to the knowledge of the proposer." 

a. L.B.6Ez.p.n«^ 

h. Brogden t. Metro. B> Go. t App. Ca. aoi. 

c Houaehold Ins. Oo. t. Oimnt, 4 Ex. D. SO. 

^Honsebold Ins. Co. v. Grant— The settled rule in the Americmn 
courts is, that the contract is complete as soon as the acceptance is duly 
mailed or placed in the hands of an agent of the proposer, whaterer may 
be the subsequent fate of the letter ; but if the acceptance be sent by an 
ag^nt of the acceptor, then it is insufficient unless received by the pro 
poser. Vassar v. Camp, 11 N. Y. 441; Trevcr v. Wood, 86 N. Y. 807; 
Washburn t. Fletcher, 42 Wis. 152; Minnesota Oil Co. t. CoUier Lead 
Go. 4 DilL 431 ; Bryant ▼. Booze, 55 Oa. 438; Mactier t. Frith, 6 Wend. 
108; Taylor t. Merchants* Fire Ins. Co. 9 How. 890. Contra^ McCol* 
lough ▼. Eagle Ins. Co. 1 Pick. 278. See 7 Am. Law Rer. p. 488, " Oon- 
tract by Letter ;** Pomeroy on Contracts, sec. 67. And this is true even 
though a letter revoking the proposal may have been mailed before the 
acceptance, provided the acce|)tor has not received notice of the revoca- 
tion. Id. ; Hamilton v. Lycoming Inn. Ca 5 Penn. St 842; Langstrauss 
V. German Ins. Co. 48 Mo. 201 ; Stockham v. Stockham, 82 Md. 196; Hal- 
lock V. Commercial Ins. Co. 2 Dutch. 268. But a proposal may be made 
on condition that notice and acceptance be received. Vassar v. Camp, 11 
M. Y. 441; Lewis ▼. Browning, 130 Mass. 17& 



Ghapw L g «. OFFER AND AGUEPTANCE. 31 

This rale enables an acceptor to revoke his acceptance 
nnder certain circumstances; if, for instance, he can antici- 
pate the letter of acceptance by a telegram of revocation. 
Bat the position of the parties where a letter of acceptance 
is lost is a strange one. The offerer is bound by an accept- 
ance which he has not received, the acceptor is free from all 
liability under the contract. The rule is a somewhat clumsy 
contrivance for securing a power of revocation to the ao* 
ceptor, without much regard to general principle, or even to 
general convenience. 

•§ 6. UfUU the moment of acceptcmoe cm offer is rev- [*25] 

ocable. 

Offer can be revoked before acceptance. — An offer, un- 
accepted, creates no legal rights; it follows, therefore, that it 
may be withdra^vn before acceptance;^ but before consid- 
ering the rules which relate to the communication of a with- 
drawal we must note an exception to the rule. 

It seems that an offer made under seal cannot be revoked, 
and that even though uncommunicated to the party to 
whom it is intended to be made, it remains open for his ac- 
ceptance when he becomes aware of it. 

Unless made ander seaL — There is no doubt that a grant 
under seal may be binding on the grantor and those who 
claim nnder him, though it has never been communicated to 
the grantee, if it has been duly delivered.^ And it seems 
equally true that a deed which purported to create an out- 
standing obligation would be upon the same footing. ^' If 
A make an obligation to B and deliver it to Oj this is the 
deed of A presently. But if O offers it to B^ then B may 
refuse it in pais and thereby the obligation will lose its 
force." • 



tk Dm d. GarauMM ▼. Knlgfat^ 6 B. ft a flTL 
k Arttar ft BAkar*! Omo, Ook» Bep. Ul, M^ 



^Houghwoat V. BoiBaubin, IS N. T. Eq. 816; Larmon ▼. Jordan, M 
ni 306: SchenactadT Store Go. ▼. Holbrook. 101 N. T. i6» 



It FORMATION OF CONTRACT. Fart IL 

The point waa mnoh discussed in Xenos v. Wickhamy* in 
which a policy of marine insurance '^ signed, sealed and de- 
livered " by the defendants, the insurers, was never accepted 
by the plaintiff, the insured, but remained in the defendants' 
office. The House of Lords held that the assent of the in- 
sured was not necessary to entitle him, when he became 
aware of the loss of his ship, to the benefit of the policy. 
Blackburn, J., in giving an opinion which the House of 
Lords adopted, said, ^^ It is clear on the authorities, as well 
as on the reason of the thing, that the deed is binding on 
the obligor before it comes into the custody of the obligee, 
nay even before he knows of it; though of course if he has 
not previously assented to the making of the deed the 
obligee m^y refuse it" The position of the parties in such 
a case is anomalous. Agreement there can be none where 
there is no mutual assent; but he who has made and deliv- 
ered the deed is in the position of a man who has made 
[*26] *an offer which he may not revoke, but which is not 
a contract till assented to by the promisee. 

Notiee of revocation must be commnnicated. — It re- 
mains to lay down as a general rule that revocation, like 
offer and acceptance, must be communicated. We shall 
have further to consider whether there are any exceptions 
to this rule, and, if so, whether these exceptions can be 
brought into accord with any intelligible principle. 

Revocation must be communicated, and the cases in which 
the law upon this point has been most clearly settled are 
cases in which the parties are dealing with one another by 
correspondence, we will limit our remarks in the first in- 
stance to such cases. 

And here we must note a difference in the meaning of the 
word communication according as it is used for acceptance 
or revocation. An acceptance b communicated when it is 
despatched; a revocation is not communicated till it is re- 
ceived. 



Oh^p^LSSb OFFER AND AOUiarrANG& 8B 

In Byrne v. Van Tienhavm^ the defendant at Cardiff on 
October 1st wrote an offer to the plaintiff at New York ask- 
ing for a reply by cable. On the 11th the plaintiff received 
the letter and at once accepted the offer in the mode re- 
qnesied. On the 8th the defendant had posted a letter 
revoking his offer. 

Thus two qnestions arose, as stated by Lindley, J. : ^ L 
Whether a withdrawal of an offer has any effect until it is 
communicated to the party to whom the offer has been 
sent? 2. Whether posting a letter of withdrawal is a com- 
munication to the person to whom the letter is sentt''^ 
And it was held ^^ tjiat both legal principle and practical 
convenience require that a person who has accepted an of- 
fer not known to him to have been revoked shall be in a 
position safely to act upon the footing that the offer and 
acceptance constitute a contract binding upon both parties." 
The rule thus laid down had long been settled law in Amer- 
ica, but was not established in England until the year 1880.* 

It would however appear to follow naturally from what 
has been said as to the moment of acceptance in contracts 
made by correspondence. The law regards the offerer 
as making *his offer during every instant of time that [*27] 
his letter is traveling and during the period which 
may be considered as a reasonable time for acceptance. The 
party to whom the offer is made is therefore entitled to con- 
sider that it is still being made, unless he hears to the con- 
trary, and that his acceptance concludes a binding contract. 

Moment of communication is moment of receipt. — Nor 
caa the revocation be held to be communicated merely be- 
cause it has been put in course of transmission. The post is 
used by the offerer as his messenger to take the offer and 
bring back the acceptance. Therefore the acceptance is 
communicated to him when put into the charge of his in- 
strument of communication. But his revocation cannot be 



«. sap. n.sH. 

k ByoMT. VaaTI«ih«v«i^ Sa p. D. Hk 

A TijlMT.]taQhuiiJ1i«IoikOiw9Bifwaid,Ml 



M FORMATION OF OONTRACT. PMtll 

considered to be communicated till it is received, fo r it ii 
bet ter to reptrJ thft pogfnfTi^*^ o r telegrap h wire, notaa^e 
Igent of both partie s. ^uL a^ thit nyggsen gor ena ployed b y 
the offerer for the purposA nf nfft^r sLr\^ ^Q^^^Qptanfift- 

It is true that the minds of the parlies are not ad idem in 
the case of a contract concluded by an acceptance despatched 
after a revocation has been already posted, and it must be 
admitted that where parties are contracting at a distance 
from one another the ct/n/terifffis ad idem can only be arrived 
at by some such artificial process as the theory of the con 
tinning offer, and that the rule as established in Byrne o. 
Va/n Tienhoven is in accord with sense and convenience. 

Cases conflicting with this ^ule.— But there are two 
oases which conflict with this rule, and these need examina- 
tion. 

In Cook V. Odey * the defendant offered to sell specific 
goods to the plaintiff on certain terms and to keep the offer 
open until 4 o'clock that day. Cook averred that he did 
agree within the time allowed, but that Oxiey failed to de- 
liver. The Court held that the promise to keep the offer 
open till 4 o'clock was not binding for want of considera- 
tion, and that ^' the promise can only be supported on the 
gronnd of a new contract made at 4 o clock ; but there is no 
pretense for that. It has been argued that this must be 
taken to be a complete sale from the time the condi- 
[*28] tion was complied with; but it *was not complied 
with, for it is not stated that the defendant did agree 
at 4 o'clock to the terms of the sale, or eoen that ike goodh 
u)ere kept till that tirne,^^ The case turned or the pleadings; 
that is to say it was decided on the ground tlat the plaint- 
iff's declaration did not disclose a good cause cf action by 
alleging a contract. But it certainly would seem that the 
Court not only regarded Oxley as free to revoke his offe*' a* 
any time before acceptance, but free to revoke it by a men 
lale of the goods without notice. 

The judgments are even open to the construction that the. 

• •T.B.aSl.iMrBullM.J. 



Chap. L g «. OFFER AND ACCEPTANCE. 89 

regard Oxley's offer as no more than an invitation to do 
business on certain terms within a certain time; and not as 
an offer which, unless revoked, might be turned by accept- 
ance into a binding contract.^ 



^The case of Cooke r. Oxlej, 8 Term R. 653, is frequently dted in 
the American courts. For a rev^iew of the criticisms on this important 
cam, see 1 Benj. on Sales (4th Am. ed. i, sec. 64. 

Reftissls.— It is not ancommon for persons to offer property for sale 
S^ranting a " refusal ** of the offer for a specified time, h is settled, how- 
eirer, thai the offer may, neverthel<''ss, be retracted in the interval, if no 
ooosideration has been given for the promise to hold it open. Benjamin 
on Sales, sec 41. The difficult question is, what amounts to a retraction? 
L Where the parties are in immediaV^ communication, the offer may 
be withdrawn at any time before acce{)ta'iee, and it seems that any overt 
mot, indicating that the proposer has chsut^ed his intention, as a sale of 
the property in question to another, amounts to a withdrawal, and, as 
some courts hold, even though notice thereof is not brought to the knowl- 
edge of the acceptor. Bean v. Burbank, 16 M<). 458; Gillespie v. Ed- 
mnnston, 11 Humph. (Tenn.) 568; Fomeroy or Contr. sec. 61; Tucker 
▼. Woods, 12 Johns. 190. 

Other cases hold that notice of the withdrawal is essential, without 
which the offer may be regarded as continuing and subject to accept* 
anoe within the prescribed time, and that on its acceptance the objection 
of want of mutuality is removed. Boston & Maine R. R. v. Bartlett, 9 
Cosh. 225 (disapproving Cooke v. Oxley, vupra)\ floughwort ▼. Boisau- 
bin, 18 N. J. Eq. 818; Eskridge v. Gloeer, 5 S. & P. (Ala.) 264; 26 Am. 
Dec. 844; School Directors v. Trefethren, 10 Brad. (111.) 127; Cheney ▼. 
Cook. 7 Wis. 418. See 1 Story on Cont. (5th ed. ) sec 498, n. 

2. .When the parties are at a distance f r nm ^ft/ h nthftr i^^d t'-ftnft*^^ thiiir 
boainess throagh correspondenc e, i t is clearly the settled law of Ih is 
nonnlgy th^t. thA nffAr w pT^iimA<i tn hiive been renewed during every 
momeni t tf ^ tim A limited, and upo n ^t^j^ prpg^im^^j^n the acceptor 
f'nf ^ " ^ht to rely and ooncludA ^h^ c^ntt^ot hv m>^^pfcftnrv^ Rt urxj 
time before receiving notice of a withdrawal. 1 Parsons o^^ Cont. 484; 
Benjamin on Sales, sec. 44 ; Larmon ▼. Jordan, 66 lU. 204 ; Moore ▼. 
Pienon, 6 Iowa, 278 ; Hamilton v. Lycoming Ins. Co. 5 Barr, 839 ; Averill 
9. Hedge, 12 Conn. 434; cases cited p. 24, n. 

It ja believed^ however, th at with re^rd to this question there is m : 
r ational distinction between contracts inter absentees a nd ^hoee inter pr»j- 
gntoeg. and ti^t ^hft weiyht of authority m AmpHnu Ib to the effect thiu 
no withdrawal of a proposal before the time M Iow^H h^ AUpwArf jg 
J^ffffTlf"'^ ""^' VTinwlflrtfTft nf thnt withdrawal i^j ipmA utait Ar>mm«nL 
Ttfml ift thft r*"^" t€^\^t*^ thA prnpn^nf , « No formal notice is necee- 
Mrr to> oonetitute a withdrawal It is anffioiant that the perton makiiig 



m FORMATION OF CONTEAGT. Ftet H 

A more reoent case is DuMnson v. Dodds* a suit for spe- 
oifio performance of a contract onder the following circnm- 
stances: On the 10th Jane, 1874, Dodds gave to Dickinson 
a memorandum in writing as follows: — ^'I hereby agree to 
sell to Mr. George Dickinson the whole of the dwelling- 
houses, garden ground, stabling and out-buildings thereto 
belonging, situated at Oroft, belonging to me, for the sum 
of £800. As witness my hand this 10th day of June, 1874 
« £800 {Siffned) John Dodds. 

^P. 8. This offer to be left over until Friday, 9 o'doct 
4. ic J. D. (the twelfth) 12th June, 1874. 

{Signed) « J. Dodds.*' 

On the 11th of June he sold the property to another pe^ 
son without notice to Dickinson. As a matter of fact Dick- 
inson was informed of the sale, though not by any one 
authorized to give such information by Dodds. . He gave 
notice, after the sale but before 9 o'clock on the 12th, that 
he accepted the offer to sell, and sued for specific perform- 
ance of what he alleged to be a contract 

The Oourt of Appeal held that there was no contract 
James, L. J., after stating that the promise to keep the offer 
open could not be binding, and that at any moment 
[*29] *before a complete acceptance of the offer one party 
was as free as the other, goes on to say, " It is said that 
the only mode in which Dodds could assert that freedom was 
by actually and distmctly saying to Dickinson, ^^now I 
withdraw my offer." Ijaj^^hAfi^ tknt th^^ *> ^^t^fr prin- 
ciple nor cviUkority far ihe proposition thai thers mtafff Jm a m , 

the offer does some act inoonsisteiit with it— as, for egampto, aellf the 

property in question to another purchaser, and that the person to whom 

the offer was made has knowledge of such act" Pomerpj' on Oont sea 

6L It has been urged, not on English or American authority, however. 

^ that a party should not be aUowed to withdraw his offer before the 

. i lapse of the appointed time, unless by agreement with the other, ee- 

l pedaUy where the making of the offer has betrayed the other par^ into 

lo0B of time and money in preparing for an aooeptanosii 1 Btoiy od 

Ooot.sea4M. 



L §6b OFFER AND ACX^EPTANGE. 87 

moiualmdjMpraM mihdraMal gf fJut gfarj nr whai is aallsd 
m j^^aeta^ion. It mnst> to constitute a contract appear tha t 
th flJbwo minds were nnA ^t t.hA gRTnft moTnt^pt. ^f tj^A. that 
JM^ at there was an o ffer oontinaing np to tha momflnt nf 
acceptance , U there was not snch a continaing oflfe r y then 
t\iQ ay^ ptance oonx fta to notl^inp^.'^ 

Both Lords Justices James and Mellish lay great stress 
on the fact that Dickinson knew at the time of his accept- 
ance that the land was actually sold, and do not appear to 
consider it material that the information reached him acci- 
dentally and not by authority of Dodds. 

It must be admitted that the language of James, L. J., is 
in direct antagonism to the n^e laid down by Lindley, J., 
in Byrne v. Van Tienfuyoen^ and unless the cases can be 
distinguished this decision of three Lords Justices of Ap- 
peal must throw doubt on the ruling of a single Judge in a 
Divisional C!ourt. 

Three grounds of distinction may be suggested. 

(1) Is notice ftom any source sufficient! — We may re- 
gard the knowledge of the acceptor as a good notice of rev- 
ocation, and say with Mr. Pollock that ^^ the case decides 
that knowledge in point of fact of the proposer's changed 
intention, however it reaches the other party, will make 
the proposer's conduct a sufficient revocation." ^ But this is 
dangerous ground. In Dickinson v. Dodds the matter of 
the contract was the sale of specific land, and the plaintiff 
knew that the property had been passed to another and 
that the defendant had no longer the power to fulfill his 
offer. But would the same rule apply in the case of an of- 
fer of personal services and notice from a stranger that the 
offerer had made an inconsistent engagement? Or would 
it apply if, before the plaintiff in Byrne v. Ywn TienAoven* 
had telegraphed his acceptance, a stranger had tele- 
graphed to him that a letter *of revocation was on [*30] 
its way t The conduct of business would surely be im- 

«. Auto, pi 20k 
k PriaoiplMOfl 

csap.ixM. 




m fOBMATION OF OOMTRAOr. PMtlL 

peded by sooh a rale, for the aooeptor would not know whom 
to belieyei or how fkr he eonldventore to act on a oontraot 
which he might otherwise have eondaded by acceptance. 

BcBides, the distinction is not enough to meet the yeiy 
explicit langoage of James, L. J., italicised above. 

(9) Is there dilTerence in case of sale of speelflc thing!— 
fbe distinction may be fonnd in the fact that in both the 
cases jnst cited the matter of the contract was the sale of a 
specific thing; and it may be that a sale to another, by 
which the property is paned to him, is a sufficiently overt 
set to amount to notice of revocation. This is suggested 
by the reporter in the head-note to DickiMan v. DodcU and 
is apparently regarded as an important feature in that case 
by Mellish, L J., but his language does not take the matter 
beyond the range of a suggestion. 

(8) Or in case of parties being in direct communica- 
tion t — Some part of the language of James, L. J., would 
almost warrant the view that where parties are in direct 
communication, and are not dealing with one another by 
correspondence, the theory of the ^^ continuing offer" does 
not hold. But in business there must be many offers which 
do not contemplate, perhaps do not admit of, an immediate 
answer; jn these cases a reasonable time is allowed during 
which the offer is open or ^ continuing,'' and a mere mental 
revocation would not avail against an acceptance made 
within a reasonable or a prescribed time. 

The difficulties arising out of this case may be conven* 
ienUy summarized. 

Summary of difficulties. — There is an offer outstanding 
for the sale of a specific thing, which offer may be turned 
into a promise by an acceptance within a limit of time fixed 
by the parties. If the parties had been contracting by cor- 
respondence, then as against an acceptance made within 
that time a revocation would be of no avail unless it were 
previously communicated to the acceptor. An unauthorized 
communication is made to the intending acceptor that 
[^81] the offerer has, not merely formed the intention of 



OtepwL§7. OFFEB AND AOOKFTANG& M 

reToking his offer, bat has actually sold the thing offered. 
The acceptor in the full belief, as he admitted, that the 
property had actually passed to a third party, endeavors, 
by an acceptance made within the prescribed limit of time, 
to bind the offerer. 

The offerer had done nothing to communicate his inten- 
tion to reroke, or his revocation, up to the moment of ao* 
oeptance, yet he was held not to be bound. 

Possible solntlons. — It must be left to the Courts to die* 
tinguish this case, whenever it may be necessary to do so, 
from Byrne v. Van Tienhoven. They will have to say 
whether the ground of distinction lies in the fact of com- 
munication being made somehow of the offerer's changed 
intention; or in the fact that what the offerer did was not 
merely to change his mind, but, by the sale of the specific 
thing offered, to put it out of his power to fulfill his offer; 
or in the fact that the parties were not contracting by cor- 
respondence; or, lastly, in the fact that the acceptor ad- 
mitted that he made his acceptance in the full knowledge 
that the offerer not only unnUd noi but no longer amid per- 
form his offer. 

In all transactions by correspondence the argument from 
convenience as well as from principle is irresistible in favor 
of the rule in Byrne v. Van Tienhcven ; but we must deal with 
the cases as we find them, and there can be no doubt that the 
decision in DuJkinean «. Dodde raises a diflculty which is as 
yet unsolved. 

§ 7. An offer need not le made to an aeeertained pereon^ but 
no eontraet eon ariae until U hoe been accepted by an 
aeeertained person. 

An ofliDr may be made to all the world. — The proposi 
tion is best understood by an illustration. The proposal by 
way of advertisement of a reward for the rendering of oer 
tain services, addressed to the public at large, becomes a 
contract to pay the reward so soon as an individual renden 
the services, but not bef (Mre. 



40 FOEMATION OF OONTBAGT. PMt H 

A eontraet cannot arise from it till it la accepted bj 
one. — To hold that any contractual obligation exists 
[*32] before the ^services are rendered would amount to 
saying that a man may be bound by contract to an 
indefinite and unascertained body of persons, or, as it has 
been expressed, that a man may have a contract with the 
whole world. This would be contrary to the notions both 
of Agreement and Obligation, which we have ascertained 
to co-exist in Contract. Agreement is the expression of a 
common intention, and there can be none while intention is 
expressed on one side only; nor can we say that Obligation 
in the sense of a vinculum juris exists between a definite 
proposer, and the indefinite mass of persons to whom it is 
open to accept his proposal' The matter would have 
seemed beyond doubt if it were not that Savigny considered 
that an obligation of this indefinite character was created 
by such a proposal as we have described. From the diffi- 
culties which would arise, owing to the obligation being 
incurred to unascertained persons, he would aUow no right 
of action to accrue, but, upon the performance of the con- 
dition, he put the promisor in the position of a man who 
owes a debt of honor which is not recoverable in a Court of 
Law.^ This view has never been seriously entertained in 
English law; the promise is regarded as being made, not to 
the many who might accept the offer, but to the person or 
persons by whom it is accepted. One may think, with sub- 
mission to the great authority of Savigny, that his mode of 
dealing with this subject arises from a disregard or forget- 
fulness of the principle that the preeminent feature of 
Obligation is the binding together of definite persons by a 
wncvJAim juris; that until the parties have emerged from 
the mass of mankind the bond cannot attach to them. 

Difficulties in English law. — The difficulties which have 
arisen in English law are of a somewhat different character, 
but are capable, it should seem, of a satisfactory solutioik 

«. SavlffiiT*! ttoir. 
kSw.ObLI^MaA. 



L87. OFFER AND ACCEPTANCB. 41 

They gpring from two sources. (1) The aoceptor may not, 
at the time of his doing what amounts to an acceptance, 
realize all the terms of the offer. Oan he afterwards 
take advantage of them? *(2) It is sometimes diffl- [*88] 
colt to distinguish representations of intention to act 
in a particular way from invitations which, if accepted, 
become binding promises. 

(1) Motive of acceptance. — The first difficulty is well il* 
Instrated by the case of WiUiams v. Carwwrdme^ Reward 
was offered by the defendant for information which the 
plaintiff suppUed, though not with a view to the reward. 
It was held that the defendant was liable as upon a con- 
tract concluded by the supply of the information asked for. 

If it appeared clearly from the facts of this case as re- 
ported that the plaintiff was unaware of the defendant's 
offer, it might be asked, whether that could be an agreement 
in which one of the parties knew nothing of the intention 
of the other.^ But the only point urged in the argument 
for the defendant was that the reward was not the motive 
which induced the plaintiff to supply the information, and 
the Court held that the motive was immaterial, and that 
« there was a contract with the person who performed the 
condition mentioned in the advertisement" 

(2) Intimation of course of conduct as distinct from in- 
vitation. — The second difficulty arises where we have to 
distinguish statements of intention which can result in no 
liability ex carUractu from general offers the acceptance of 

«.4&aAd.aSL 

1 The case of Fitch ▼. Snedaker, 88 N. Y. 260, answere the mathoPs 
question in the negatived Plainti£F sought to reooyer for seryices ren- 
dered before he knew of any reward having been offered. The court said : 
''To the existence of a contract there must be mutual assent, or in an- 
other form, offer and consent to the offer. Thd motiye inducing consent 
may be immaterial, but the consent is yitaL Without that there is no 
contract. How then can there be consent or assent to that of which the 
^0rtj has neyer heard? ** Stampers y. Temple, 6 Humph. 118 ; S. G. 44 
Ahl Dea 896; Maryin y. Treat, 87 Oonn. 96; Howland y. Lmindi^ 61 
N.Y.604. 



4S FORMATION OF CONTEACT. FwlIL 

which by individuals oonstitutes a contract It has been 
asked, in substance, whether an acceptance of the general 
offer in sach a case binds the proposer to f olfiU all its terms.* 
For instance, does the existence of its published time-table 
bind a railway company to carry passengers according to 
its terms! 

The real difficulty in such cases is to ascertain, among 
the Yarious surroundings of the contract, which of these 
amount to terms, and which are merely matters of induce- 
ment Everything which can be regarded as a term in the 
offer becomes a promise on the acceptance of the offer. 
Whether the jnomise is absolute or qualified is important^ 
but not here.* 

In some cases the distinction above mentioned is not 
easy to draw. 
[*84] Of a sale by aactlon.— *Thus in HarrU v. it^iUbr- 
9on^ an advertisement by an auctioneer, that a sale of 
certain articles would take place on a certain day, was held 
not to bind the auctioneer to sell the goods, nor to make him 
liable upon a contract to indemnify persons who were put to 
expense in order to attend the sale. Blackburn, J., said: 
'< Unless every declaration of intention to do a thing creates a 
binding contract with those who act upon it, and in all cases 
after advertising a sale the auctioneer must give notice of 
any articles that are withdrawn, we cannot hold the de- 
fendant liable." 

On the other hand, the advertisement of a sale wUhaui 
reserve was held, in Warlow v. UaarUon^ to create a bind- 
ing contract between the auctioneer and the highest bidder 
that the goods should be knocked down to hinL *^ The 
sale,'' said Martin, B., " was announced by them (the auc- 
tioneers) to be ^^ without reserve." This, according to all 
the cases both at law and in equity, means that neither the 
vendor nor any person in his behalf shall bid at the auction, 

•» FoJlook on Oonl 17. 
k Put V, oh. t, 1 1 



L § T. OFFER AND ACXIIEPTANCfi. a 

and that the property sbal] be sold to the highest bidder, 
whether the sam bid be equivalent to the real value or not" 

''We oannot distinguish the case of an auctioneer putting 
up property for sale upon such a condition from the case of 
the loser of property offering a reward,* or that of a railway 
oompany publishing a time-table stating the times when, 
and the places to which, the trains run. It has been decided 
that the person giving the information advertised for, or a 
passenger taking a ticket, may sue as upon a contract with 
him. Upon the same principle,^ it seems to us that the 
highest hona fide bidder at an auction may sne the ano- 
tioneer as upon a contract that the sale shall be without 
reserve.'^ Such was the opinion of the majority of the 
Oonrt of Exchequer Chamber.^ 

The sabstantial difference between the cases seems to lie 
in this: that not merely the number, but the intentions, of 
the persons who might attend the sale must be unasi^rtain- 
able, nor oould it be certain that their legal relations 
would *be eventually altered by the fact of their [*85] 
attendance. A might come intending to buy, but 
might be ont-bid; B might come with a half-formed inten- 
tion of baying if the goods went cheaply; C might come 
merely for his amusement It would be impossible to hoU 
that an obligation could be established between the ano 
tioneer and this indefinite body of persons, or that their 
losses could be ascertained so as to make it reasonable to 
hold him liable in damages. The highest bidder, on the 
other hand, is an ascertained person, fulfilling the terms of 
a definite offer. The distinction therefore bears out the 
proposition laid down at the commencement of this diaouih 
noQ. 



c AoffBMI T. BateM, 15 M. ft W. 887. 

Ii DaBtOB ▼. O. N. BAflwaj Oa. 6 B. ft & 88Ql 

%, Wartoir ▼. ButImb, 1 B. ft B. ai8. 



OflAPTER n. 
Form and Consideration. 

Necessity for oae of these marks in English law.— We 
Aave now dealt with the mode in which the common inten- 
tion of the parties should be oommanicated by the one to 
the other so as to form the basis of a contract But it is 
not enough that snch commnnicatioa should be made as we 
have described, or even that the parties should intend it to 
refer to legal consequences. Most systems of law require 
some further evidence of the intention of the parties, and in 
default of such evidence mere intention will not avail to 
create an obligation. In English law this evidence is sup- 
plied by Form and Oonsideration; sometimes one, some- 
times the other, sometimes both are required to be present 
in a contract to make it enforceable. By Form we may be 
taken to mean some peculiar solemnity attaching to the 
expression of Agreement which of itself gives efficacy to 
the contract; by Oonsideration some gain to the party mak- 
ing the promise, arising from the act or forbearance, given 
or promised, of the promisee. 

History of the matter. — Alike in English and Roman law, 
Form, during the infancy of the system, is the most im- 
portant ingredient in Contract. The Courts look to the 
formalities of a transaction as supplying the most obvious 
and conclusive evidence of the intention of the parties, and 
Oonsideration is an idea which, if not unknown, is at any 
rate imperfectly developed. It would not be desirable here 
to enter upon an antiquarian discussion, which is neverthe- 
less of considerable interest. It is enough to say that 
English law, and probably also Boman law, starts 
[«8T] *with two distinct conceptions of Contract One, 
that any promise is binding if expressed in Form of 



L FOBM AND CONSIDERATION. 45 

a certain kind: the other that the acceptance of benefits 
of a certain kind implies an enforceable promise to repay 
them. The theory that the Boman Contracts developed 
oat of Conveyance in an order of moral progression seems 
to rest on no snre evidence; and there is reason to believe 
that the earliest of them were those with which we are fa- 
miliar as the contracts Verbis and Be. The solemnities of 
a promise by formal question and answer bound the prom- 
isor to fulfill an intention thus expressed, and the re-adjust- 
ment of proprietary right, where money or goods had 
been lent for consumption or use, led to the enforcement 
of the engagements known as Mutuum and Commodatum. 
In English law we find that before the end of the thir- 
teenth century two analogous contracts were enforceable: 
one Formal, Uie contract under seal; one informal, arising 
from sale and delivery of goods, or loan of money, in which 
the consideration had been executed upon one side, and an 
implied or express promise to repay would support an 
action of Debt Beyond this, the idea of enforcing an in- 
formal promise, simply because a benefit was accruing or 
was about to accrue to the promisor by the act or forbear- 
ance of the promisee, does not appear to have been enter- 
tained before the middle or end of the fifteenth century. 

The Formal Contract of English law is the OarUraot tm- 
dar SeaL In no other way than by the use of this Form 
oould validity be given to executory contracts, until the 
doctrine of consideration began to make way. We have to 
bear in mind that it is to the Form only that the Courts 
look in upholding this contract; the eansensite of the par- 
ties has not emerged from the ceremonies which surround 
its expression. Courts of Law will not trouble themselves 
with the intentions of parties who have not couched their 
agreement in the solemn Form to which the law attaches 
legal consequences. Nor, on the other hand, where 
Form is present *will they ask for further evidence [*38] 
as to intention. Later on, owing in great measure 
we may suspect to the influence of the Court of Chancery, 



4$ fOBMATION OF OONTBACL Fut XL 

the Courts begin to take account of the intention of the 
parties, and the idea of the importance of Form undergoes 
a oorions change. When a contract comes before the Ck>Qrt8y 
eyidenoe is required that it expresses the genuine intention 
of the parties; and this evidence is found either in the 
solemnities of the Contract under Seal, or in the presence 
of Consideration, that is to say, in some benefit to the 
promisor or loss to the promisee, granted or incurred by 
the latter in return for the promise of the former. Grad- 
ually Consideration comes to be regarded as the important 
ingredient in Contract, and then the solemnity of a deed is 
said to make a contract binding because it *^ imports con- 
sideration," though in truth it is the Form which, apart 
from any question of consideration, carries with it legal 
consequences. 

Before considering in detail the classes of contract which 
English law recognizes, it is well to conclude the historical 
outline of the subject of Form and Consideration. 

We have stated that the only contracts which English 
law originally recognized were the Formal contract under 
Seal, and the informal contract in which Consideration was 
executed upon one side. How then do we arrive at the 
modem breadth of doctrine that any promise based upon 
Consideration is binding upon the promisor! This question 
resolves itself into two others. How did informal execu- 
tory contracts become actionable at all! How did Consid- 
eration become the universal test of their actionability! 

Remedies for breach of promise in Bracton. — To an- 
swer the first question we must look to the remedies which, 
in the early history of our law, were open to persons oom- 
plaining of the breach of a promise, express or implied. 
The only actions of this nature, during the thirteenth and 
fourteenth centuries, were the actions of Covenant, of Debt^ 
and of Detinua Covenant lay for breach of promises 
made under Seal: Debt for liquidated or ascertained claims, 
arising either from breach of covenant, or from 
[*89] non-payment *of a certain due for goods supplied. 



FOBM AND OONSIDERATIOM. 47 

work done, or money lent: Detinne* lay for the recovery 
of specific chattels kept back by the defendant from the 
plsuntifF. These were the only remedies based upon con- 
tract. An executory agreement, therefore, unless made un- 
der seal, was remediless. 

The remedy by which such promises were eventually 
enforced is a curious instance of the shifts and turns by 
which practical convenience evades technical rules. The 
breach of an executory contract, until quite recent times, 
gave rise to a form of the action of Trespass on the case. 

This was a development of the action of Trespass: ^ Tres- 
pass lay for injuries resulting from immediate violence; 
Trespass on the case lay for the consequenaos of a wrongful 
act| and proved a remedy of a very extensive and flexible 
character. 

Origin of action of assumpsit— Reasons for Its exten- 
sion. — This action came to be applied to contract in the 
following way. It lay originally for a malfeasance, or the 
doing an act which was wrongfid ah initio: it next was ap- 
plied to a misfeasance, or improper conduct in doing what 
it was not otherwise wrongful to do, and in this form it ap- 
plied to promises part-performed and then abandoned or 
negligently executed to the detriment of the promisee:* 
finally, and not without some resistance on the part of the 
Courts, it came to be applied to a non-feasance, or neglect 
to do what one was bound to do. In this form it adapted 
itself to executory contracts. The first reported attempt' 
so to apply it was in the reign of Henry lY., when a car^ 
penter was sued for a non-feasance because, he had under 
taken, qtiare assumpsisseij to build a housej and had made 
default The judges in that case held that the action, iJ 

m. TbtB Onart of AppMl hM deddad thai tlw aotioB of Dettnae is founded la tori 
But thouch the wroBfcful detentton of coods !■ the cause of metiotL, Uie remedy mmj of^ 
pt7 10 cMee in which the poMwrton of the goods originsted in the oortraet of Baa 
flMttk^ (Bee Judgment of Brett. L. J., aft 9. M.] 

h. Spemae, Chano. JuHSdlotion, I, ML 

c B as f ^ od. Ftolasoa, li, BBBi MS. 

dL FoOook, Ml. ed. 4 



48 FORMATION OF CX)NTRACr. Pvt m 

anjy must be in ooyenant, and it did not appear that the 
promise was under seal Bat in course of time the desire 
of the King's Bench to extend its jurisdiction, the 
[*40] ^ear that the Common Pleas might develop the ac- 
tion of Debt to meet the case of executory promises, 
or that the Court of Chancery might extend its extraor- 
dinary powers, and by means of the doctrine of considenu 
tion, which it had already applied to the transfer of interests 
in land, enlarge its jurisdiction over contract, operated to 
produce a change in the attitude of the Common Law 
Courts. Before the end of the reign of Henry VIL it was 
settled that the form of Trespass on the case known hence- 
forth as the action of Assumpsit would lie for the non-feas^ 
ance or non-performance of an executory contract; and 
the form of writ by which this action was commenced 
continued to perpetuate this peculiar aspect of a breach of 
a promise until recent enactments for the simplification of 
procedure. 

It is not at all improbable that the very difficulty of ob- 
taining a remedy for breach of an executory contract led in 
the end to the breadth and simplicity of the law as it stands 
at present If the special actions ex contractu had been 
developed to meet purely executory informal engagements, 
they would probably have been applied only to engagements 
of a particular sort, and a class of contracts similar to the 
consensual contracts of Homan law, privileged to be in- 
formal, might have been protected by the Courts, as excep- 
tions to the general rule that Form or executed Consideration 
was needed to support a promise. 

But the conception that the breach of promise was some- 
thing akin to a wrong, the fact that it could be remedied 
only by a form of action vhich was originally applicable to 
wrongs, had a somewhat peculiar result The cause of ac- 
tion was the non-feasance of that which one had undertaken 
to do, not the breach of a particular kind of contract; it 
was Uierefore of universal application. Thus all promises 
would become binding, and English law was saved the tech- 



IL FORM AND CX)NSIDERATION. 49 

nicalitieB which must neecb arise from a classifioation ot 
oontracts. Where all promises may be actionable it f oUowi 
that there must be some universal test of actionability, 
*and this test was supplied by the doctrine of Consid- [*41] 
eration. 

Origin of consideration as a test of actionability is un- 
certain. — It is a hard matter to say how Consideration 
came to form the basis upon which the validity of informal 
promises might rest Perhaps it may suffice for our pres- 
ent purposes to say that the ^^ quid pro quo^^ as it is styled in 
some of the early reports, was probably borrowed by the 
Oommon Law Courts from the Chancery/ 

For the Chancellor was in the habit of inquiring into the 
intentions of the parties beyond the Form, or even in the 
absence of the Form in which, by the rules of Common 
Law, that intention should be displayed, and he would find 
evidence of the meaning of men in the practical results to 
them of their acts or promises. It was thus that in the 
region of conveyance, the Covenant to stand seized and the 
Bargain and sale of Lands came to be enforced in the Chan- 
cery before the Statute of Uses; and the doctrine once ap- 
plied to simple contract was found to be of great practical 
convenience. When a promise came before the Courts they 
asked no more than this: "Was the party making the 
promise to gain anything from the promisee, or was the 
promisee to sustain any detriment in return for the prom- 
ise! " If so, there was a " quid pro quo " for the promise, 
and an action might be maintained for the breach of it. 

Gradual growtli of doctrine. — So silent was the develop- 
ment of the doctrine that Consideration was the universal 
requisite of contracts not under seal, and so marked was the 
absence of any express authority for the rule in its broad 
and simple application, that Lord Mansfield was able in the 
middle of the last century to raise the question whether, in 
the case of commercial contracts made in writing, there 



10 FORMATION OF CONTRACT. But EL 

was any necessity for Consideration to support the promisa 
In the case of Pillans v. Van Mierop * he held, and the rest 
of the Oourt of King's Bench concurred with him, that 
the custom of merchants would give efficacy to a writ- 
ten promise for which no consideration could be 
[*42] shown. The case was decided on another 'point, and 
the doctrine was emphatically disclaimed in the opin- 
ion of the judges delivered not long afterwards in the 
House of Lords, in Bonn v, Uuglies; * but the question 
raised serves to show that the breadth of the law upon this 
subject was, until comparatively recent times, hardly real- 
ized by those who had to administer it. 

[•4SJ •CLASSIFIOATION OF CONTRACTS. 

Ck>ntracts are Formal, or Simple* — There is but one 
Formal Contract in English law, the Deed or Contract un- 
der seal; all others are simple contracts depending for their 
validity upon the presence of Consideration.^ The Legisla- 
ture has, however, imposed upon some of these simple con- 
tracts the necessity of some kind of Form, and these stand 
in an intermediate position between the Deed to which its 
Form alone gives legal force, and the Simple Contract which 
rests upon Consideration and is free from the imposition of 
any Statutory Form. La addition to these a certain class 
of Obligation has been imported into the Law of Contract 
under the title of Contracts of Record, atd though these 
obligations are wanting in the principal features of Con- 
tract, it is necessary, in deference to established authority, 
to treat of them here. 

%, % Burr. 1671. 

1 Oontracto are spodaltiee or parol oontracts; there is no rach middle 
olaae ae oontracte in writing. ContracCe in writing but not under eeal 
are pard oontracte. WhitehiU v. Wilson, 8 P: A W. (Penn.) 406; Pm^ 
rina V. Gheeeeman, S Halated (N. J.\ 174 



11.81 



CLASSIFICATION OF CONTBACTa 



SI 



Classlfleatlon of contracts.— The Contracts known to 
Bnglish law may then be divided thus : — 
A. FormaL 



«A dependent for 
their validity 
npon their Form. 



L Contracts of Record. H'^^^^r^'" 
8. Contract nnder Seal 



"'^^v e*.^' 



Jl f^ \. 



..:j 



. dependent for 
their validity 
npon the pres- 
ence of Con- 
sideration. 



8. Contracts required by 
law to be in some 
form other than nii> 
der Seal 



4. Contracts for which no 
form is required. 

It will be best to deal first with the essentially formal con- 
tracts, then with those forms which are super-imposed upon 
simple contracts, and then with Consideration, the requisite 
oommon to all simple contracts. 



*F0BMAL CoBTRAOr. 

1. CcntracU qf Record. 



[•44] 



Ckmtracts of Record. — The obligations which are styled 
Contracts of Record are Judgment, Recognizance, Statutes 
Merchant and Staple, and Recognizances in the nature of 
Statute Staple. . 

(1) Judgment — How it originates. — And first as to 
Judgment.^ The proceedings of Courts of Record are en- 
tered upon parchment rolls, and upon these an entry is made 
of the judgment in an action when that judgment is final' 

> A jadgment is the fioal oonsideTatioii and determination of a ooorl 
€f oompetant jurisdiction upon the matters submitted to it, and it is only 
•TideDoed by a record or that which is by lawsubstitated in its stead. 
Whitewidl t. Emory, 8 Mich. Si, In Rae t. Holbert, 17 DL (m, it is 
said: ** A jadgment is no more a contract than is a tort" The qpJMsita 
Tiew is e»pr c Boe d in Hosse t. Tappan, S Qmy, 4iL See I^reeman oh 
Judgments, sea 4L 

> A judgment does not exist untQ rendered in due form an 
ootbevBCord. Gieen t. Probate Judges 40 MIofcu SM; Kaapp t. ] 
8SN.T.SSfL 









J^ 



6 






k 



m FORMATION OF CONTRACT. Flut A. 

A judgment awarding a snm of money to one of two liti- 
gants, either by way of damages or for costs, lays an obliga- 
tion npon the other to pay the sum awarded. This obligation 
may come into existence as the final result of litigation 
when the Court pronounces judgment, or it may be created 
by agreement between the parties before litigation has 
commenced, or during its continuance. .Where it is so cre- 
ated the obligation results from a contract for the making 
of which certain formalities are required; this contract is 
either a warrant of aUomeyy by which one party gives au- 
thority to the other to enter judgment upon terms settled, or 
a oagnavU actiansmj by which the one party acknowledges 
the right of the other in respect of the pending dispute and 
then gives a similar authority. 

Its characteristics. — The characteristics of an ubliga- 
tion of this nature may be shortly stated as follows: — 

1. Its terms admit of no dispute, but are conclusively 
proved by production of the record.^ 

S. So soon as it is created the previously existing rights 
with which it deals merge, or are extinguished in it: for in- 
stance, A sues X for breach of contract or tot civil injury: 
judgment is entered in favor of A either by consent or after 
trial: A has no further rights in respect of his cause of 
action, he only becomes creditor of X for the sum awarded. 

8. The creditor, as we may conveniently call the party 

in whose favor judgment is given, has certain advan- 

[*45] tages *which an ordinary creditor does not possess. 

1 The judgment of a ooortof record, after a trial on the meritB» haying 
jurifldiction of the cause and of the parties, le binding and conclusive 
upon the parties and priTies, upon the same subject matter, in any court, 
until it is regularly vacated or reversed by some court in a proceeding 
for that purpose. La Grange t. Ward, 11 Ohio, 267; Pennywit v. 
Foote, 27 Ohio St 600; Strong v. Lawrence, 68 la. 65; The Rio Grande, 
2S WaU. 468; HoUister v. Abbott, 81 N. H. 442. A judgment rendered 
oo an issue at law is conclusive as to aU matters weU pleaded, Oregon- 
ian Bfy Co. v. Oregon R*y, 27 Fed. Rep. 277. Upon an issue of fact it is 
eondlusi ve only as to fkcts without the existence and proof or sdniissiijii of 
wnioh it could not have been rendtted. HiU t. Mobm^ tl Ma. CMS; Bui^ 
Ion T. flhannnn, 22 ] 



Ghi^w n. 8 1. FOBM. CONTRACTS OF BEOORD. » 

He has a double remedy for his debt; he can toSle out 
exeoation upon the judgment and so obtain directly the 
sum awarded, and he can also bring an action for the non* 
fulfillment of the obligation. For this purpose the judgment 
not only of a Court of Eecord, but of any Court of com- 
petent jurisdiction, British or foreign, is treated as creating 
an obligation upon which an action may be broughf for 
money due.* 

He had also before 27 and 28 Yict. c. 112, a charge upon 
the lands of the judgment debtor during his life-time; but 
since the passing of that statute lands are not affected by 
a judgment until they have been formally taken into exe- 
cution. 

(2) Becognlzance. — Becognizances have been aptly de- 
scribed as ^^ contracts made with the Crown in its judicial 
capacity." ^ A recognizance is a writing acknowledged by 
the party to it before a judge or oflSicer having authority 
for the purpose, and enrolled in a Court of Becord. It may 
be a promise, with penalties for the breach of it^ to keep 
the peace, or to appear at the assizes. 

(8) Statutes Merchant and Staple. — Statutes Merchant 
and Staple and Becognizances in the nature of a Statute 
Staple are chiefly of interest to the student of the history 
of Beal Property Law. They have long since become ob- 
solete, but they were once important, inasmuch as they 
were acknowledgments of debt which, when made in a#- 

«. Wmianu ▼. Jonei, IB K. ft W. SBSL 

tTechnicany a reoognizanoe is an obligation enUred ofrtoord def«a» 
ible on condition that the recognizor do some act required of him and 
spedfied in the record, as to appear in answer to charges made agaiost 
him to keep the peace, to pay a debt, or the like. An ordinary bond 
with oonditioEia ib not a common law recognizance. Hicks t. State, S 
Ark. 818; People t. Graham, 1 Park. (N. Y.) Gr. Ul. In American 
pnctioe^ howerer, recognizanceB ere generaUy an ordinary bond signed 
•nd sealed l^ the recognizor with sureties, and containing penally and 
«B<iditi^i^ as required 1^ law. 



94 FOBMATION OF CONTRACT. Ptet IL 

oordanoe with Statntoiy provisioiui and enroUed of Record, 
created a charge npon the lands of the debtor. 

It will easily be seen how little there is of the trae natnro 
of a contract in the so-called Contracts of Becord. «/ydj/- 
menia are obligations dependent for their binding force, 
not on the consent of the parties, but upon their direct pro- 
molgation by the sovereign anthority acting in its judicial 
capacity. Becognizanoes are promises made to the sovereign 
with whom, both by the technical roles of English 
[*46] *Law and upon the theories of Jurisprudence, the sub- 
ject cannot contract. Statutes Merchant and Staple 
share the characteristics of judgments. We may therefore 
dismiss these obligations altogether from our consideration. 

§ 3. Contract under SeaiL 

The only true Formal Contract of English law is the 
Contract under Sealj sometimes also called a Deed and 
sometimes a Specialty. It is the only true Formal Con- 
tracts because it derives its validity from its Form alone, 
and not from the fact of agreement,* i^or from the consid- 
eration which may exist for the promise fM either party. 
It will be convenient in dealing with the Contract undet 
Seal to consider (1) how it is made; (3) what are its chief 
characteristics as distinguished from simple contracts; (8) 
under what circumstances it is necessary to contract under 
seaL 

(1) Eow a Contract under Seal i$ made. 

Signed^ sealed and delivered. — A deed must be in writ- 
ing or printed on paper or parchment^ It is often said to 
be executed, or made conclusive as between the parties, by 
being ^ signed, sealed and delivered." Of these three the 
signature is a matter as to the necessity of which there is 
some doubt, though no one,* unless ambitious of giving hif 

«L Aiit*«ift.n. 

Il Shappwd, ToQolMtoMi Ba 
* Ooooh ▼. Goodnuuk, 9 4> B^ MT. 



Clft.IL8iL FORM. OONTRACT UNDEB SEAL. 0» 

DADie to a leading case, would omit to sign a deed. But 
that wluch identifies a party to a deed with the ezecntion 
of it is the preBenoe of his 9eal; * that which makes the deed 
operative, so far as he is concerned, is the fact of its ds- 
Uwry by him. Delivery is effected either by actually hand- 
ing the deed to the other party to it, or to a stranger for 
his benefit, or by words indicating an intention that the 
deed should become operative though it is retained in the 
possession of the party executing/* In the execution of a 

m, ZtMtT.Wlckhuii,L.&tH.L.»l 

1 At oommon law a seal waa an imprearion upon wax or wafer affixed 
to an fa»traiiieDt» bat a wax or wafer is no longer eeaential, and an im- 
praMkm upon paper, so that the court can recognise the teal, is soffl- 
cient Pillow t. Roberta, 18 How. 478; Pierce t. Indreth, 106 U. a 54& 
But a aoroU with a pen is not a common law aeal and deaervee no notice. 
Warren t. Lynch, 5 Johns. Rep. 845; Perrine t. Cheeseman, S Halat 
(N. J.) ITOw The atatutea of many atatea authorise the uae of a acroU 
m a aeal, and while the affixing of a common law aeal, though it be 
not mentioned in the instrument, constitntea a deed, it has been held 
that where a aoroll ia uaed under the statute there must be some recog- 
nitioo of it aa a seal in the body of tho instrument. Wing ▼. Chase, 85 
Ma. 800; QromweU t. Tate, 7 Leigh (Va.), 801 ; Glasscock t. Qlasscw^ 
8 Ho. 517; Hartindaie, Convey, sea 180. The authorities are not in ao 
ooad upon this question, and while much may depend on the wording ol 
tiie statute allowing the acroU, atiU it ia believed that if the device 
adopted ia intended to be a aea^ it ia to be regarded aa such, though the 
intention be not expressly declared. The presumption ia that the pai^ 
ties vndertodk to execute auch an instrument aa would be efftxstual for 
the pnrpoae intended. Burton v. Leroy, 5 Sawyer, C C R. 510. 

s Steele T. Lowry, 4 Ohio, 78; Kemp v. Walker, 15 Ohio, 118; Otia v. 
^lencer, 108 UL 884; Ruckman v. Ruckman, 88 N. J. Eq. 869; McOnl- 
looghT. Day, 45 liioh. 558; Bogie v. Bogie, 85 Wia. 558; Otia v. Spencer, 
108 DL 888; Dunham v. Pitkin, 58 Mich. 504. The question of deliveiy 
ia a qoeation of intent A delivery without the intent to deliver ia not 
a dettvety. Jordan t. Davia, 108 BL 888; Adama v. Ryan, 51 la. 78a 
Aeoeptanm by the grantee ia neceeaary in order to constitute a good d^ 
ttveay, but where a grant is plainly beneficial to the grantee its aocept- 
aoea la presumed. MitcheU v. Ryan, 8 Ohio St. 877. And the aimple 
ieci ei< ilin g of the deed by the grantor may, under the circumstances of 
iSbm Oiieb be prima facU evidence of delivery and acceptance. Tobin v. 
68 Ha 554; Vaughn t. Goodman, 108 Ind. 489; Sweeny t. 
14 Lea (Tenn.), 818; Burke v. Adama, 80 lio. 504; Walkw 



m FOBMATION OF CX)NTRACrC Pkurta 

deed ander ordinary oircnmstances, seals are affixed before 
hand, and the party executing the deed signs his name, 
places his finger on the seal intended for him, and 
[•47] *atter8 the words "I deliver this as my act and 
deed.'' Thns he at once identifies himself with the 
seal, and indicates his intention to deliver, that is, to give 
operation to the deed. 

Escrow. — A deed may be delivered subject to a condition ; 
it then does not take effect until the condition is performed : 
during this period it is termed an escrow^ but immediately 
upon the fulfillment of the condition it becomes operative 
and acquires the character of a deed. There is an old rule 
that a deed, thus conditionally delivered,* must not be de- 
livered to one who is a party to it, else it takes effect at 
once, on the ground that a delivery in fact outweighs 
verbal conditions. But the modern cases * appear to show 
that this technical rule will not be adhered to, if the inten- 
tion of the parties is clear that the deed should be delivered 
•onditionally.^ 

Indenture and deed poll* — The distinction between a 
Deed Poll and an Indenture is no longer important since 8 

•^ Sbepp. Touch. BO. 

Il Hudaoa T. B«vett» 6 Bii«. 887. 

T. Burke, 107 DL 54; Palmer t. Palmer, S3 la. d04; Moore t. QUes, 49 
Omn. 570; but not conclusive. JefferMU v. HeU, 81 Ky. 516 ; Hendricks 
V. Basson, 6S Mich. 575. There may be a good deUvery though actual 
po oDOos ion of deed remain in the grantor; but if he retains possession of 
the deed as evidence of his dominion over the title, there is no delivery. 
WiUiams v. Schurts, 42 Ohio St 47; Ooodlete v. KeUey, 74 Ala. 218; 
McLaughlin v. McMangiU, 68 Tex. 668; Ireland v. Qerharty, 15 Fed. Bep. 
85; Davis t. Williams, 57 Miss. 848; Burnett v. Burnett, 40 Mich. 862; 
Obok V. Brown, 84 N. H. 476. 

1 The "old rule" is pretty generally followed in this country. Adeed 
delivered to the grantee therein named wiU not be an escrow but a deed 
absolnte as to delivery. Stevenson v. GrapneU, 114 BL 19; MoOan v. 
Atherton, 106 Bl. 81; Williams v. Higgins, 60 Ala. 517; Wendlinger v. 
Smith, 75 Va. 809; Dawson t. Hall, 2 Mich. 890; Cocke v. Barker, 49 N. 
T. 110; WorraU v. Munn, 5 K. Y. 229; Braman t. Bingham, 96 N. T. 
«8 ; fUrbanks v. Me toalf , 8 Mass. 280 ; State of New Jers^ r. Thatcher, 
41 N. J. Lb 408; DunoanT. Ftpe» 47Qa. 445. 



Obi^k. n. §8. FORM. CX)NTRACT UNDEB SEAL. 07 

and 9 Vict a 106, s. 5/ Formerly a deed made by one 
party had a polled or smooth-cut edge, a deed made be- 
tween two or more parties was copied for each on the same 
parchment, and the copies cut apart with indented edges, 
BO as to enable them to be identified by fitting the parts 
together. Such deeds were called Indentures. The statute 
above mentioned provides that an indented edge shall not 
be necessary to give the edect of an Indenture to a deed 
purporting to be such. 

(2) C/iaracteristics of Contract und&r Seal. 

{a) Estoppel* — Statements made in a simple contract, 
though strong evidence against the parties to the contract, 
are not absolutely conclusive against them. Statements 
made in a deed are absolutely conclusive against the parties 
to the deed in any legal proceedings between them taken 
a|X)n the deed. ^^Tho principle' is that where a man has 
entered into a solemn engagement by and under bis hand 
and seal as to certain facts, he shall not be permitted to 
deny any matter he has so asserted." Such a prohibition 
to deny facts is termed an estoppel} 

*(4) Merger. — Where two parties have made a sim- [*48] 
pie contract for any purpose, and afterwards have 
entered into an identical engagement by deed, the simple 
contract is merged in the deed and becomes extinct. This 

Ou Pw Taunton, J., In Bowman t. Taylor, 2 A. & E. 278. 

1 Van Rensselaer ▼. Kearney, 11 How. 322; Moore ▼. Walla WaUa, % 
Wash. 184; Qerry ▼. Stimpeon, 60 Me. 186; Beers ▼. Beers, 22 Mich. 42; 
Sage ▼. Jones, 47 Ind. r^2; Howard ▼. Massengale, 13 Leaflenn.), 577; 
Dobbin ▼. Cmger, 108 111. 188; Douglass y. Scott, 5 Ohio, 199; Green v. 
Clark, 13 Vt 158. Statements of immaterial matters or of matters by 
way of general recital in a deed are not conclusive, and it has long been 
held that an acknowledgment of the receipt of consideration expressed 
in the deed might be contradicted. Bigelow on Estoppel, p. 266. 

As between a stranger to a deed and a party to it, recitals therein do 
not work an estoppel. Thomason t. Dayton, 40 Ohio St 68; BrittainT. 
Dttnieia, 94 N. C. 781; AUen t. Allen, 46 Pa. St. 478. 



S8 FOBMAHON of CX)NTBACT. Ftet n. 

extinction of a lesser in a higher security, like the extinction 
of a lesser in a greater interest in lands, is called merger} 

(c) Limitation of actions. — A right of action arising ont 
of simple contract is barred if not exercised within six years. 
A right of action arising ont of a contract under seal is 
barred if not exercised within twenty years. 

These general statements must be taken with some quali- 
fications to be discussed hereafter.* 

{d) Remedies against debtor's estate. — Remedies have 
been and are possessed by the creditor by deed against the 
estate of the debtor,' which are not possessed by the cred- 
itor of a simple contract debt, and which mark the im- 
portance attached to the Formal contract In administering 
the personal estate of a testator or intestate person, cred- 
itors by specialty were entitled to a priority over creditors 
by simple contract. Their privilege in this respect is taken 
away by 82 & 33 Vict c. 46. 

As regards the real estate of a debtor, the creditor by 
specialty was also preferred. If the debtor bound himself 
and his heirs by deed, the Oommon Law gave to the cred- 
itor a right to have his debt satisfied by the heir out of the 
lands of his ancestor; the liability thus imposed on the heir 
was extended to the devisee by 3 & 4 WilL & Mary, c. 14, 
s. a. This statute was repealed by 11 Geo. IV. & 1 WilL 
IV. 0. 47, only for the purpose of extending the creditor's 
remedy to some cases not provided for by the previous Act 
During the present century, however, creditors by simple 
contract have also acquired a right to have their debts 

fl. See Put V, oh. Ill, 4. 

1 Banorgee ▼. Horej, 6 Majas. 11 ; Coleman ▼. Hart, 36 Ind. 256 ; Burnes 
r. AUen, 9 Ired. (N. C.) L. 870; Beiry t. Baoon, 88 Miss. 818; po9t, 
p. 82S. 

The manifest intention of the parties most control, and a parol agree- 
ment wiU not merge in a contract under seal, which was expressly re- 
ceived as eoUateral security, Charlee t. SgoU, 1 Serg. & R. (Pa.) 894. 

s In most of the American states creditors by deed have no greater 
remedies against the estate of deceased debtors than simple oontraot 
oreditoca. 



Ubap. n. § 2. FORM. CONTBACT UNDEB SEAL. (59 

satisfied oat of the lands of the debtor; bat it shoold be 
noted that the creditor by specialty can claim against heir 
or devisee of real estate ^ithoat the intervention of the 
Ooart of Chancery, the creditor by simple contract most 
get the estate administered in Chancery in order to 
make *good his claim. When the estate is so admin- [*49] 
istered the creditor by specialty has, since 32 & 33 
Vict. c. 46, no priority over the simple contract creditor, 
whether it be realty or whether it be personalty that is ad- 
ministered by the Court. 

{e) Gratuitous promise under seal Is binding* — A gra- 
tuitous promise, or promise for which the promisor obtains 
no consideration present or future, is binding if made under 
seal, is absolutely void if made verbally, or in writing not 
under seal.^ It has already been mentioned that this char- 

iln the states generally a seal imports oonsideratiozi, but in most 
states want of consideration may be shown in defense to an action on a 
sealed instrument. Wing t. Chase, 85 Me. 260; Case ▼. Boughton, 11 
Wend. 106; Gray ▼. Hadkinson, 1 Bay, 278; Solomon v. Kimmel, S 
Binn. 282; McCarty ▼. Beach, 10 CaL 461. This is generaUy regulated 
by statute. 

By the California Code " a written instrument is presumptive evidence 
of consideration,'' and " aU distinctions between sealed apd unsealed 
instruments are abolished." Civil Code 1S74, §§ 1614, 1620; Ortucan v. 
Dickson, 18 CaL 88. Similar provisions are found in the Codes of Iowa, 
Eentucky, Elansas and Indiana. 

In Aller v. Aller, 40 N. J. L. 446, a statute providing that, in an ac- 
tion on a sealed instrument, ** the seal thereof shall be only presumptive 
evidence of a sufficient consideration, which may be rebutted," came 
before the court for construction. Plaintiff had received from her 
father as a present a note, under seal, containing ft promise to pay her 
a certain sum of money. In an action on the note want of considera- 
tion was relied on as a defense. The important principle was announced, 
that the statute i>ermitting the defense of want of consideration does 
not apply to contracts under seal, wherein it is manifest that the parties 
intended and understood that there should be no consideration; that 
the mischief which the above quoted statute was designed to remedy 
was, that where the parties intended there should be a consideration, 
^bej were prevented by the common law from showing none if the con- 
tract was under seal; and that the statute was not intended to abolish 
aU distillation between special t i e s and simple contraota, and to deprive 



10 FORliATION OF CONTRACT. Ptot IL 

aoteristio of contracts tinder seal is often accounted for on 
the ground that their solemnity imports consideration, and 
that this supposition is historically untrue, inasmuch as it is 
the Form alone which gives effect to the deed. The doc- 
trine of Consideration is, as we have seen, of a much later 
date than that at which the Contract under Seal was in full 
efficacy, an eflScacy which it owed entirely to its Form. 
And the doctrine of Consideration, as it has developed, has 
steadily tended to limit the peculiarity of the Contract un- 
der Seal with which we are now dealing, and to introduce 
exceptions to the general rule that a gratuitous promise 
made by deed is binding. 

Even at Common Law,' in the case of contracts made in 
restraint of trade, consideration is necessary, though the 
contract be under seal. This instance is exceptional, though 
the rule is general that if there be a consideration for a deed, 
it is open to the party sued upon such a contract to show 
that the consideration was illegal, or immoral, in which case 
the deed will be void.^ 

Equitable view of absence of consideration. — But it is in 
tho Court of Chancery that we find this privilege most en- 
croached upon. The idea of Consideration as a necessary 

a. MaUao t. May* U M. ft W. 665. 

6. CoUliii T. Blantern, 1 Sm. L. C p. 308. 

one of the right to make a binding voluntarj promise, if he bo desiriHl, 
provided he used such solemnities in form as had been long recognized 
as sufficient to express such desire and intention. Scudder, J., who 
rendered the opinion, said: '* The significance of writings under seal, and 
their importance in our common law system, seem in danger of being 
overlooked in some of our later legislation.** 

In Candor's Appeal, 27 Pa. St. 119, in a case somewhat similar, the 
court said: "To say that the 'want of consideration* is a defense 
against a bond is to express, in language not remarkable for precision, 
nothing more than the familiar principle thnt where the obligor faUs to 
receive the consideration contracted for, and on the faith of which he 
entered into the contract, he is not bound to pay his bond. This pi in- 
dple has no application whati*ver to the case before us, because no con' 
tideration vpos contracted for or expecteiL** See McMillan v. Ames, 8S 
Minn. 260; Yard ▼. Patton, 18 Pa St 285; Spicer t. Binker, 40 Mich. 
680; Gordon ▼. Moore, 44 Ark. 840. 



CauHpL IL § 3. FORM. CONTRACT UNDER SEAL. 1^1 

element of Contract as well as of Conveyance, if it did not 
actoally originate in the Chancery, has always mot with 
peculiar favor there. It was by the weight given to the 
presence of Consideration, or by inferences drawn from its 
absence, that the Covenant to stand seized, the Bargain and 
Sale of lands, and the Kesnlting Use first acquired 
* validity. And in the department of Contract, Equity [*50] 
has developed similar principles. 

It would not extend its peculiar remedy of specific per- 
formance to gratuitous promises,* even though they were 
under seal It was prepared to exercise its peculiar power 
of declaring a contract void if absence of Consideration 
combined with other evidence amounted to proof that Fraud 
or Undue Influence had been brought to bear upon the 
promisor. 

Specific peTformance of a gratuitous promise, where that 
remedy is applicable, is not granted, whether the promise is 
or is not made by deed.^ And absence of Consideration is 
corroborative evidence of the presence of Fraud or Undue 
Influence, sufficient proof of which will avoid the deed. 

Bonds. — The best illustration of a gratuitous promise under 
seal is supplied by a Bond. A Bond may be technically de- 
scribed as a promise defeasible upon condition subsequent; 
that is to say, it is a promise by ^ to pay a sum of money, 
which promise is liable to be defeated by a performance by 
j1 of a condition stated in the bond. The promise, in fact, 
imposes a penalty for the non-performance of the condition 
which is the real object of the bond. The condition desired 
to be secured may be the payment of a sum of money or 
the doing or forbearing from some act. In the first case 
the instrument is called a common money bond : in the sec- 
ond a bond with special conditions. 

A promises Xthat on the ensuing Christmas Day he will 

OLflaeFftrtV.clLiii^fa. 

iBUck T. Cotd, 2 H. dt a. 100; Smith t. Wood, 13 Wis. ias. 



83 FORMATION OF GONTBACr. FtotU 

pay to X£500; with a condition that if before that day ha 
has paid to X £250 the bond is to be void. 

A promises Xthat on the ensuing Christmas Day he will 
pay to X£500; with a condition that if before that day M 
has faithfully performed certain duties the bond is to be 
Yoid. 

Legal aspect of a bond. — Common law has differed from 
Equity in its treatment of bonds much as it did in its treat> 
ment of mortgages. 

Equitable aspect. — Common law took the Contract 
[*51] in its literal sense and ^enforced the fulfillment of 
the entire promise upon breach of the Condition. 

Equity looked to the object which the bond was intended 
to secure, and would restrain the promisee from obtaining 
more than the amount of money due under the condition or 
the damages which accrued to him by its breach. 

The rights of the promisee are now limited by Statute to 
the amount of loss actually sustained by breach of the con- 
dition, and the rules of Common law as regards penaltieB 
have been assimilated to the practice of Equity.* 



(8) Wken it is esaerUial to emjUoy the Contract under seal. 

Though usually a matter of choice, it is in some cases 
necessary by Statute or at Common Law to employ the form 
of a deed. 

Statutory requirements* — Thus a deed is necessary by 
S & 9 Vict. c. 106, for making such leases as the Statute of 
Frauds requires to be in writing: by 54 Qeo. ILL a 56, for 
ui agreement for the sale of sculpture with copyright: by 
che Companies Clauses Act, 8 & 9 Vict, a 16, for the inm- 
fer of shares in companies governed by that Act: by the 
Merchant Shipping Act, 1854,* for the transfer of a British 
Ship. 

A. 8Jfctwm.m.e.n;<AftABa^&lf;MJfcMVIsl«uttl See PirtIV,«^ ■,{& 
iiltA18Vlfllo.l04,|fifiw 



IL 8 8. FORK. CONTRACT UNDER SEAU 63 

Gommon law requirements. — There are two cases in 
whioh Oommon Law demands that a contract should be 
made under seal 

(a) Gratuitous promises* — A gratuitous promise or con- 
tract for which there is no consideration must be made by 
deed, otherwise it will be void. This has already been 
shown to furnish a distinguishing characteristic of Formal 
as opposed to simple Contracts. 

(ft) Contract with corporation. — The general rule as to 
contracts made with corporations is that a c&rporaUan ag 
gregaU can only ie hound by contrctcts under the seal of ths 
eorporaiion} A corporation is a fictitious, not a natural 
person; and some evidence is required that the aggregate 
of individuals composing it is really bound to that which 
the contract purports to promise. This evidence is supplied 
by the use of the seal common to the corporation. 

*There are, however, numerous exceptions to the [*62] 
general rule; exceptions which may be classified 
under two heads, as (1) cases in whioh the rule would defeat 
the objects for which the corporation was created, and (2) 
cases in which the operation of the rule would occasion 
great and constant inconvenience. 

The first head applies more particularly to trading corpo- 
rations,* which as the law now stands may through their 
agents enter into simple contracts relating to the objects 

A. Sooliilrdaiid OoDImtOo. T. Waddle L.B. I a P. 400. 

1 The doctrine that a oorporatioii can contract onlj under its corpo- 
rate aeal ia repudiated in this country. The use of a seal in the variour 
obligations undertaken hj corporationB at the present time would be 
impractical, and it is well settled that the contracts which a corporation 
das the power to make may be made in the same manner that a nat- 
ural person would make them, in the absence of any special restriction 
m the charter. Bank of Columbia v. Patterson, 7 Cranch, 299; Bank of 
U. & T. Danbridge, 13 Wheat 64; Blunt ▼• Walker, 11 Wis. 884; 
Board of Education ▼. Oreenebaun, 89 DL 009; Chestnut Hill Turnpike 
T. Rntter, 4 Serg. A R. 16; School District v. Wood, 18 Mass. 199; MotI 
r. Hicka,lCow. (N. Y.)618; Danf orth t. Schoharie* 12 Johna. S87. 



64 FORMATION OF CONTRACT. Part IL 

and purposes for which the body was incorporated ; and if 
these objects make it expressly necessary, may even issue 
negotiable instruments. 

The second head applies more particularly to non-trading 
cases, and may be taken to include: — 

Matters of trifling importance or daily necessary occur- 
rence, as the hire of an inferior servant,* or the supply of 
coals to a workhousa 

Matters of urgent necessity, admitting of no delay; as 
where a municipal corporation possessed a dock and mside 
agreements from time to time for the admission of ships, it 
was held that such agreements need not be under seal* 

In addition to these exceptions at Common Law, the Leg- 
islature has in some cases freed corporations from the neces- 
sity of contracting under seal, and provided special forms 
in which they may express their common assent. 

It has been questioned whether, when a corporation enters 
into a contract not under seal, and the contract has been 
executed in part, such execution gives rights to the parties 
which they would not have possessed if the contract had re- 
mained executory. Where a corporation * has done all that 
it was bound to do under a simple contract it may sue the 
other party for a non-performance of his part But there 
is no doubt that a part-performance of a contract by a cor- 
poration * will not take the case out of the general rule, and 

entitle it to sue. 
[*63] *Nor can a corporation be sued on contracts not un- 
der seal of which it has enjoyed a partial benefit; 
indeed it would seem that entire performance by the plaint- 
iff will only give him a remedy where the amount is small 
and the work necessary.* 

a. NlcholK>D T. Bradfleld Union, L. R. 1 Q. B. eao. 

b. Wells T. The Mayor of Kini^ton upon Hull, L. R 10 0. P. 401 
«. Ftehmon^n* Oompanj t. Robertson, 5 M. A Qr. 192. 

d. Mayor of Kidderminster t. Hardwick, L. R 9 Ex. S4. 

& FW BramweU, L. J., Hunt t. Wimbledon Local Board, 4a P. D. 81 



EL § a. SIMPLE CONTRACTS IN WEITINa m 

Simple Contraot. 

§'8. Simple Contracts required tolein writing. 

All require consideration. — We have now dealt with the 
contract which acquires validity by reason of its Form 
alone, and we pass to the Contract which depends for its 
validity upon the presence of Consideration. In other wordfl^ 
we pass from the Formal to the Simple Contract, or from 
the Contract under seal to the parol Contract, so called be- 
cause, with certain exceptions to which reference will now 
be made, it can be entered into by word of mouth. 

Some are required In addition to be expressed in cer- 
tain form. — There are certain simple contracts which the 
law will not enforce unless written evidence of the terms of 
the agreement and of the parties to it is produced ; but Form 
is here needed, not as giving efficacy to the contract, but as 
evidence of its existence. Consideration is as necessary as 
in those cases in which no writing is required: ^^if contracts 
be merely written and not specialties, they are parol and 
consideration must be proved." • 

These are therefore none the less Simple Contracts, be- 
cause written evidence of a certain kind is required concern- 
ing them. 

Common law requirements. — The only requirement of 
form in simple contract which can be said to exist at Com- 
mon Law is in the case of Bills of Exchange, which by the 
custom of merchants, adopted into the Common Law, must 
be in writing. 

Statutory requirements. — The statutory requirements 
of form in simple contract are mainly to be found in the 29 
Car. U. a 3, the famous Statute of Frauds. There are some 
others, however, and we may deal with them shortly. 

1. The acceptance of a bill of exchange must be in writ- 
ing; 19 & 20 Vict. c. 97, § 6; 45 & 46 Vict. o. 61, § 17. 

*2. Assignments of copyright must be in writing. [*54] 
This subject is dealt with by numerous statutes. 

•. SMpoit* ^ Ml 

5 



66 FORMATION OF OONTRACT. Fut U 

8. OontraotB of Marine Insurance must be made in the 
form of a policy; 30 Yict. c. 23. 

4. The transfer of shares in a company is usually required 
to be in a certain form by the Acts of Parliament which 
govern companies generally or refer to particular compa- 
nies.* 

5. An acknowledgment of a debt barred by the Statute 
of Limitation must be in writing signed by the debtor, 9 
G^. lY. c. 14, § 1 (Lord Tenterden's Act), or by his agent 
duly authorized, 19 and 20 Yict a 97, § 13 (Mercantile Law 
Amendment Act). 

6. The Statute of Frauds, 29 Car. 11. o. 8, contains two 
sections, the 4th and the 17th, which affect the form of cer 
tain simple contracts and which require careful considera- 
tion. 

The 4tli section enacts, ^ That no action sAaU he hroughi 
/J^srhereby to charge any executor or administrator upon any 
special promise to answer damages out of his own estate ; oiQ) 
whereby to charge the defendant upon any special promise 
to answeiL for the debt, default or miscarriage of another 
person {^ to charge any pei^M upon any agreement made 
in consideration of marriage^^ upon any contract or sale 
of lands, tenementa or hereditaments, or any interest in or 
concerning them^iar upon any agreement that is not to be 
performed within the space of one year from the making 
thereof; unless the agreement upon which such action shall 
be brought, or some memorandum or note thereof, shall be 
in writing, and signed by the party to be charged there- 
with or some other person thereunto by him lawfully au- 
thorized." 

The discussion of these sections falls naturally into three 
heads. 

(1) The form required by the section. 

(2) The nature of the contracts specified in it 

(8) The effect upon such contracts of y "lon-coipLpranoe 
with its provisions. 

flb Llndkj M FtetBMUpk I, na 



JLit. SIMPLBCX>NTaACIS,29 CA&U.C8.g4 «7 

•(1) im] 

The foim required by the terms of the section is/ the first 
point to be considered. What is meant by the requirement 
that ^ the agreement or some memorandum or note thereof 
shall be in writing and signed by the party to be charged 
therewith or by some other person thereunto by him law- 
Tully authorized t '' 

We may, with regard to this part of the subject, lay 
down the following rules.* 

(a) The form is merely eyidentlary. — The Form re- 
quired does not go to the existence of the Contract.^ The 
Contract exists though it may not be clothed with the nec- 
essary form, and the effect of a non-compliance with the 
provisions of the statute is simply that no action can be 
brought until the omission is made good. ^ 

Thus the memorandum or note in writing may be made, 
so as to satisfy the statute, at any time between the forma- 
tion of the contract and the commencetnent of an action. 

So too a party to the contract may sign a rough draft of 
its terms, and acknowledge his signature when the draft 
has been corrected and the contract is actually concluded.* 

Or again, a proposal containing the names of the parties, 
and the terms of the suggested contract, and signed by the 
proposer, will bind him though the contract is concluded by 
a subsequent parol acceptance.' In the former of these two 
cases the signature of the party charged — in the latter not 
the signature only but the entire memorandum — was made 



a, with the aocoeptlon of role «f), what is lald under this hmd maj be taktn to mff- 
plj to Ae ITth M weU as to the 4th sectton. 
^ Bunnit T. Bddowes, L. R 8 O. P. 814. 
& BeoBBT. Ficksley, L. B. 1 Bzch. I49L 

iNewtoa t. Bronson, 18 N. Y. 687; Oales ▼. Nixon, S Cow. (N. Y.) 
145; Hardman t. WoUstein, IS Mo. App. 866; Bird t. Monroe, 66 Me. 
3S7; Webster t. ZieUy, 62 Barb. 483. The benefits of the statute of 
frauds are personal and can be relied on only hy the parties or their 
privies. Chicago Dock Ca ▼. Kinzie, 49 BL 289; Heuser ▼. liamont, 66 
Fk St. 811 ; Cahm t. Bigelow, 18 Pick. (Mass.) 869; and may be waiyed 
bjthspKty charged. MoalgonMiy t. Edwaida, 46 Vt 161 ; jmsI, p. tlL 



•8 FORMATION OF CONTRACT. Part DL 

before the contract was concluded. This is perliaps suffi- 
cient to show that the Form is an evidentiary matter only, 
and is not, as in the case of a deed, an integral part of the 
contract itself. 

(S) The parties must appear. — The memorandum of the 
contract must show who are the parties to it.' For instance, 
A promised X that he would answer for the debt or 
[*66] default of M: the memorandum of the 'promise, 
though signed by A^ did not contain the name of X. 
it was held to be insufficient. " No document," it was said 
in that case, ^* can be an agreement or a memorandum ol 
one, which does not show on its face who the parties mak 
ing the agreement are." * 

It is settled, however, that a description of one of the con- 
tracting parties, though he be not named, will let in parol 
evidence otherwise inadmissible to show his identity.* This 
may occur where A as agent for M enters into a contract 
with X in his own name:* X may prove that he has 
really contracted with M, who has been described in thf^ 
memorandum in the character of A. On the other hand, 
A is not permitted to prove that he is not the real party to 
the contract.' 

{o) The memorandum may consist in various letters or 
papers^ but they must be connected^ consistent, and com- 
plete. 

The only signature required is that of the party to be 
charged : it is not therefore the fact of agreement, but the 
terms, and all the terms, of the agreement that the statute 
requires to be expressed in writing. 

A. wnitemfT. Lake, t B. ft B. 848. 
8. Tnienuui ▼. Loder, U A. ft E. 668. 
•, HigKiiiiT.8eiiior.8M.ft W. 88i. 

iMcCoimeU t. PiUhart, 17 m. 864; Grafton t. CommingB, M U. a 
100. 

SFesenden v. Mussej, 11 Cosh, (Afaas.) 197; Dykea ▼. Townaend, 84 
N. Y. 67. A signature by initiala la valiil and parol eridenoe ia aiimimphiA 
to mpplj them. Sangbom t. Flagler, 9 Allen (Maas.), 474; Salmon FVOIb 
Manuf. OCX t. Qoddard. 14 How. 447; Hunter t. Giddinga, 07 lfa«. 41. 



CSiapw n. 8 8. SIMPLE (X>NTRACTS, 29 CAIL a C 8, § 4. M 

The terms need not all be expressed in the same dooii< 
ment,* and it is permissible to prove a memorandum from 
several papers, or from a correspondence, but the connec- 
tion of the various terms must be made out from the papers 
themselves, and may not be shown by parol evidence.* 

A issued a prospectus of illustrations of Shakespeare, to 
be published on terms of subscription therein set out. JT 
entered his name in a book entitled '^ Shakespeare Subscrib- 
ers, their signatures,'* in -4's shop. X afterwards refused 
to subscribe. lie was sued upon his promise to do so, and 
it was held that there was no documentary evidence to con- 
nect the subscription book with the prospectus, so as to 
make a sufficient memorandum of the contract, and that 
'Jie deficiency might not be made good by parol evidence.* 

Must be consistent. — To say that the terms of the con- 
tract must be consistent with one another is merely 
to reiterate what has been said *under the head of offer [*57] 
and acceptance. But although the various documents 
in which the terms of a contract are found must be perfectly 
consistent with one another, yet if the contract is fully set 
out in writing it will not be atfected by a repudiation of it, 
contained in the same writing by one of the parties. They 
have agreed, the statutory evidence is supplied, a repudia- 
tion is not within the power of either to make, and its ex- 
pression is wholly nugatory.* 

Must be complete. — Again, the terms must be complete 
in the writing. Where a contract does not fall within the 
statute, the parties may either (1) put their contract into 
writing, (2) contract oidy by parol, or (3) put some of the 
terms in writing and arrange others by paroL In the latter 

m Reuss t. PlolcBley, L. R. 1 Exch. 849. 
h Boydell ▼. Dnimmond, 11 Bast, 149. 
•. Buxton T. Bust, L. R 7 Exch. 379. 

1 Adams ▼. McMillan, 7 Port (Ala.) 78; O'DonneU ▼. Leman, 48 Me. 
168; Rliodes t. Gartner, IS AUen, 180; TaUman t. FrankUn, 14 N. T. 
584; North t. Mendel, 78 Ga. 400; WaU v. Wisconsin Cranberry Co. 68 
la. 780; Morton v. Dean, 18 Met. (Mass.) 88& But see Beckwith t. Tai* 
boi» 85 U. & 289, cited post, p. 57. 



Tl FOBMATION OF CONTRACT. Part IL 

cue, although that which is written maj not be varied by 
parol evidence, jet the terms arranged by parol are proved 
by parol, and they then supplement the writing, and so 
form one entire contract But where a contract falls 
within the statute, all its terms must be in writing, and parol 
evidence of terms not appearing in the writing would 
altogether invalidate the contract, as showing that it was 
something other than that which appeared in the written 
memorandum.^ 

{d) Consideration must appear tn writing. — The con- 
sideration must appear in writing as well as the terms of 
the promise sued upon.* This rule does not extend to the 

iTioe T. Freeman, 80 Minn. 889; Bishop ▼. Fletcher, 48 Mich. 655; 
May ▼. Vizard, 184 Mass. 127; Pieraon ▼. Ballard, 82 Minn. 268; FrjT. 
Piatt, 82 Kan. 82; Peck y. Vandemark, 99 N. Y. 29; Drake t. Seaman, 
97 N. Y. 280; Willy ▼. Roberts, 27 Mo. 888; Blairv. Snodgrass, 1 Sneed 
(Tenn.), 1 ; King ▼. Wood, 7 Mo. 889 ; FarweU y. Mather, 10 Allen (Mastf.), 
822; Wright t. Weeks, 26 N. Y. 168; O'DonneU ▼. Leman, 48 Me. 15& 
It Is held by the United States supreme coort that this rule excluding 
parol proof is sobjeot to exception. Parol proof, if clear and satisfac- 
tory, may be received to identify the agreement referred to in the col* 
lateral papers constituting the memorandum. Beckwith t. Talbot, 96 
U. a 289. 

* Watn T. Warlters.^ Our decisions are in hopeless confusion upon 
this question. Many courts foUow the case of Wain t. Warlters: Sears 
T. Brink, 8 Johns. 210: Taylor ▼. Pratt, 8 Wis. 674; Gregory ▼. Logan, 
T Blackf. 112; Underwood ▼. Campbell, 14 N. H. 898 (overruled in Brit- 
ton T. Ainger, 48 N. H. 422) ; Buckley ▼. Beardsley, 2 South. (N. J.) 572; 
Sloan T. Wilson, 4 Harr. A J. (Md.) 822; Hargrove ▼. Ckx)k, 16 Oa. 821; 
Thompson ▼. Blanchard, 8 Comst (N. Y.) 885, drawing a distinction be- 
tween ** agreement ** and '* undertaking." 

Other courts repudiate the doctrine of Wain ▼. Warlters, and many 
hold that when the " agreement " is required to be in writing the ooor 
sideration must be expressed ; but where only the " promise " is required 
to be in writing the consideration need not be expressed. Oillighan ▼• 
Boardman, 29 Ma 81 ; Sage v. WUcox, 8 Conn. 81 ; Packard ▼. Richard- 
son, 17 Mass. 122; Patchin v. Swift, 21 Vt. 297; Reeds ▼. Evans, 17 Ohio, 
128 ; Halsa v. Halsa, 8 Mo. 805 ; Ashf ord v. Robison, 8 Ind. 805 ; Violette 
T. Patten, 5 Cranch, 151 ; Taylor t. Ross, 8 Yerg. 830; Ellison v. Jackson, 
12 CaL 542; Shadman v. Guthrie, 4 Met. (Ky.) 147; Shirley t. Black, 45 
Fk St. 845; Britten ▼. Ainger, 48 N. H. 422. 

Many of the states have settled the question by statutes, exprosslf 



ChB9. IL g S. SDfPLE CONTRACTS, 29 GAR H. C. 8, g ^ 71 

17th section, bnt it has been settled with regard to the 4th 
since the year 1804.* 

Bat an exception has been made in the case of the ^^ prom- 
ise to answer for the debt, default or miscarriage of another,"* 
which by 19 & 20 Vict. o. 97, § 3 (Mercantile Law Amend- 
ment Act), shall not be ^* deemed invalid to support an action^ 
suit, or other proceeding to charge the person by whom such 
promise shall have been made by reason only that the con- 
sideration for such promise does not appear in writing, or 
by necessary inference from a written document." 

(e) Signature of party or agent. — The memorandum 
must be signed by the party charged or his agent.^ 

*The contract therefore need not be enforceable at [*58] 
the suit of both parties ; * it may be optional to the party 
who has not signed to enforce it against the party who has.' 

a. WalB T. Warlten, 6 East, |i. lOi 
k Sea BMiimnhi on Sales, pp. 188-lM. 

proTiding that the oonsideration shaU be stated in the memorazidam t 
mich 18 the statutory provision in Minnesota, Oregon, Nevada and Ala> 
bama; bat in Biassachusetts, Maine, New Jersey, Indiana, lUinois, Micl>> 
igan, Nebraska, Virginia and Kentucky the statutory provision is thai 
the oonsideration need not be so expressed* 

iRafferty v. Largee, SB N. H. 64; McEbroy v. Seerey» 61 Md^ 8S9; 
Sanborn v. Sanborn, 7 Qray, 142. 

Auctioneer's memorandnnu— An auctioneer is the agent of both par- 
tiea, and as such may bind them by a memorandum in writing under 
the statute. Baptist Church v. Bigelow, 16 Wend. (N. Y.) 28; Morton 
V. Dean, 18 Met. (Mass.) 886; Meadows v. Meadows, 8 McOord (S. C.\ 
Ch. 166. But an auctioneer's memorandum, in order to bind the pox^ 
chafter, must be made at the time of the purchase, OiU v, BecknaU, 8 
Cnah. 856; Horton v. McCarty, 68 Me. 894. 

s Anderson v. Harrold, 10 Ohio, 899; Davis v. Shilds, 86 Wend. 841) 
Shirley ▼. Shirley, 7 Blackf. 462; Morin v. Martz, 18 Minn. 191; Justice 
V. Lang, 42 N. Y. 493. But where mutual promises are the considera- 
tion for a contract, the conflict of authority upon the question whether 
the memorandum should be signed by both parties is " truly bewildei^ 
Ing." Wilkinson v. Heavenrich, 68 Mich. 676 ; some courts holding thai 
nnlflSB the memorandum be signed by both parties, the cortract is void 
for want of mutuality. Id. ; Krohn v. Bants, 68 Ind. 277. CHheni hold 
thai want of mutuality is no objeotion, and that the ftatatr !r '■nmpUed 



Ti FORMATION OF CONTRACT. Ftttlft 

The rignatare need not be an actual subscription of the 
party's name, it may be a mark ; nor need it be in writing, 
it may be printed or stamped ; ' nor need it be placed at the 
end of the document, it may be at the beginning or in the 
middle. * 

But it must be intended to be a signature, and as such to 
be a recognition of the contract, and it must govern the 
entire contract 

These rules are established by a number of cases taming 
upon difficult questions of evidence and construction. The 
principal cases are elaborately set forth in Benjamin on 
Bales, pp. 188-196, but a further discussion of them would 
here be out of place.' 

idth when the memorandum ia signed bj the party to be charged. 
Bmith*8 Appeal, 69 Pa. St 480; Perkins v. UudseU, dO 111. 217. 

1 A signature by a promisor, by his mark. Ins name being written by 
khe promuee, is not a valid execution of a contract. Carlisle t. Camp- 
bell, 76 Ala. 247. See Dewey v. Young, 68 Md. 546. 

'The weight of American authority is with the text, except where 
the technical term "subscribed** instead of "signed** is found in the 
itatute. Browne, Stat of Fraudi, sea a>6 ; Wise y. Ray, 8 la. 430 ; Penni- 
man v. Hartshorn, 18 Mass. 87. For the meaning of the term " sub- 
KTibed" see Champlin t. Parish, 11 Paige (N. Y.), 405; Jamee v. Patten, 
I Seld. (N. Y.) 9; Davis v. Shilds, 26 Wend. 851. 

Proof of the sending a telegram completing a contract is sufBcient 
svidenoe of subscription to take the case out of the statute of frauds, 
rrevor v. Wood, 86 N. Y. 807 ; Whaley v. Hinchman, 22 Mo. App. 483. 
But the telegram must show tlie terms of the contract McElroy v. 
Buck, 85 Mich. 484. 

* A memorandam is Incomplete that docs not evidence: 1st, a con- 
tract concluded ; so far, at least, as the party to be charged is concerned, 
for it seems that an acceptance by the other party of the proposal made 
may be established by parol evidence. Watts v. Ainsworth, 6 L. T. N. 
& 252; Himrod Furnace Co. v. Qeveland R. R. Co. 22 Ohio St 451 ; 2d, 
the names of both contracting parties ; 3d, the subject-matter of the con- 
tract so described that it may be identified ; 4th, in contracts of sale the 
term of credit and the price agreed u()on, where a definite price and 
term of credit were contracted for ; 5th, and in many states the con- 
rideration for the undertaking. Adams v. McMillan, 7 Port (Ala.) 78; 
McConneU v. BrUlhart, 17 lU. 854; Rhodes v. Castner, 12 Allen. 180; 
E|ttGh T. OifFord, 6 CoL 498; Wood v. Davis, 82 111. 811. That in the 
mamorandum of the sale of lands the price must be mentioned* See 



OhiVn.S«. SIMPLE CONTRACrrS, 39 CAE. n. C 8» 8 4. 7» 

(3) 

Thus much for the form required under the 4th section 
for all the contracts included therein. We will now note 
the characteristics of the five sorts of contracts specified in 
the section. 

Special promise hy an executor or administrator to answer 
damages out of his own estate} 

The liabilities of an executor or administrator m respect 
of the estate of a deceased person are of two kinds. At Com- 
mon Law he may sue and be sued upon obligations devolv- 
mg upon him as representative of the deceased. In Equity 
he may be compelled to carry out the directions of the de- 
seased in resjiect of legacies, or to give effect to the rules of 
law relating to the division of the estate 6f an intestate. In 
neither case is he bound to pay anything out of his own 
pocket: his liabilities are limited by the assets of the de- 
ceased. But if, in order to save the credit of the deceased, 
or for any other reason, he choose to promise to answer 
damages out of his *own estate^ that promise must be [*59] 
in writing together with the consideration for it, and 
must be signed by him or bis agent. It is almost needless 
to add that in this, as in all other contracts under the sec- 
tion, the presence of writing will not atone for the absence 
of consideration.* 

Any promise to answer for the debt^ default^ or mtscamage 
qf another person. 

We should note these features of the contract of surety- 
ship in its relation to the Statute. 

& Baan ▼. Hughes,7T. R 850. 

Phelps ▼. StiUingB, 60 N. H. 605; Adams v. Porter, 7 Porter (Ala.), 73; 
Smith T. Arnold, 6 Maas. 414; Pliillipe v. Adarns, 70 Ala. 878; and term 
of credit. Qault y. Stormount, 51 Mich. 636 ; Grafton v. Cummings, 99 
U. a 100, Contra, EUis v. Bray, 79 Mo. 227. 

^The promise of an executor to paj an heir-at-law money if he would 
dfisist from opposition to the wiU is not within the statute. BeUows t, 
8owleB,57Vt 164 



74 FOBlfATION OF OOMTRACT. Fut IL 

(a) The prqinise differs from indemnity. — It must be 
distingaished from an indemnity, or promise to save an- 
other harmless from the results of a transaction into which 
he enters at the instance of the promisor.' 

In other words, there must be three parties in contem- 
plation; My who is actually or prospectively liable to ^, 
and Ay who in consideration of some act or forbearance on 
the part of X promises to answer for the debt, default, or 
miscarriage of M. 

Xj a bailiff, was about to arrest M.^ A promised to pay 
a sum of £17 on a given day to X if he would forbear to 
arrest If. This was held an independent promise of in- 
demnity from Ato X which need not be in writing. 

{b) Necessitates primary liability of third party. There 
must be a liability actual or prospective of a third party 
for whom the promisor undertakes to answer. If the prom- 
isor makes himself primarily bable the promise is not within 
the statute, and need not be in writing.* 

^^ If two come to a shop and one buys, and the other, to 
gain him credit, promises the seller ^ If he does not pay yauy 
IioHly this is a collateral undertaking and void without 
writing by the . Statute of Frauds.* But if he says, ^Let 

OL B«Ml«rT.Kingluuii,18 0. RN.aSR 

1 No Stress should be laid on the word " indemnity." When the prom^ 
ise to indenmifj is, in fact, a promise to pay the debt of another, it is 
dearly within the statute. Nugent t. Wolfe, 111 Pa. St 471 ; MaUory 
T. Omett, 31 N. Y. 41S; Easter ▼. VThite, 13 Ohio St 310; aementa* 
Appeal, 63 Conn. 464. A promise nnder the statute distingaished from 
mdenmity in Lerch ▼. Gallup, 67 CaL 505. That the promisor may come 
within the statute the debt must be the debt of another and not simply 
the debt of the promisee. WendeU ▼. Hudson, 103 Ind. 631 ; or the debt 
of the promisor. Brandt on Suretyship, sea 68 ; Qreen t. Estes, 88 Mou 
887; BaUey t. Bailey, 66 Vt 808. 

^Baldwin ▼. Hiera, 78 Ga. 780; De Witt ▼. Boot 18 Neb. 667; Morris 
T. Osterhouse, 66 Mich. 163. The inquiry is, to whom was credit giren. 
If any credit was given to the party receiving the benefit, then the 
other party is not holden on a verbal promise. Welsh t. Marvin, 86 
Mick. 60; Langdon v. Richardson, 68 la. 610; Bugbeer. Kendricken, 
180 Mass. 487. 

> Studly T. Barth, 64 Mich. 6 ; Meada t. Wataoo, 67 Vt 4361 



n. §8. SIMPLE CX>NTRACrrS, 29 CAB. IL C. 8, § 4. 75 

Aia% have ths goods^ 1 will he your paymaeteTy^ * or ^ I will eee 
you paidy this is aa undertaking as for himselfy and he 
Bhall be intended to be the very bayer and the other to act 
as bot his servant." ^ 

(c) And a real liability. — The liability may be prospect- 
ive at the time the promise is made, as a promise by ^ to 
X^ that if M employs X he {A) will go surety for pay- 
ment of the services rendered. Yet *it must come [*60] 
into existence at some time: else there is nosurety- 
fthip, and the promise, though not in writing, will neverthe- 
leas be actionable. Thus if Xsays to ^ ''If I am to do 
certain work for M I must be assured of payment by some 
one," and A says '' do it and I wiU see you paid," there is no 
sQietyship.* 

{d) And continuous. — If there be an existing debt for 
which a third party is liable to the promisee, and if the 
promisor undertake to be answerable for it, still the con- 
tract need not be in writing if its terms are such that it 
effects an extinguishment of the original liability.* In 
other words, the liability of the third party must be a con- 
tinuing liability in order to bring the promise within the 
statute. A promise to a creditor to pay a debt in consid- 
eration of his doing that which would extinguish his claims 
against the original debtor, would, for this reason, be un- 
affected by the Statute.* 

(d) May arise f^om wrong. — The debt, default, or miscar- 
riage spoken of in the statute will include liabilities arising 

«. For cnriAm in Biikmjr t. Darnell, 1 Sm. L. a SIO. 

li MoontiteplMn t. Tiakftman, L. B. 7 H. L. 17; and lee Jndgmeol In Bzeh. Chun. L^ 

CL Goodman t. Chaae, 1 B. A Aid. S97. 

> Laraeii t. Jenson, 68 Mich. 427. 

STrosteee Y. Lambem, 48 Ohio St. 144; Mnlcrone t. American Lain 
ber Go. 55 Mich. 622; Whittemore ▼. Wentworth, 76 Me. 70; Garliflto y 
Campbell, 76 Ala. 247; Howell ▼. Field, 70 Qa. 502; Thornton ▼. Qoioa 
73 Ala. 821 ; Meriden ▼. Zingsen, 48 N. Y. 247. 

Bat the creditor muit abaolutely release the principal debtor, anii 
•inder no circnmBtanoeB can he hold each liable severallj, at his optiom 
Welch T. Marrin, 86 Mich. 58; HiU t. Frost, 58 Tex. 25. 



Tt FORMATION OF CONTRACT. P*rt IL 

out of wrong as well as out of contract So in Kirkham 
V. Ma/rier^ M wrongfully rode the horse of X without his 
leave, and killed iU A promised to pay X a certain sam 
in consideration of his forbearing to sue J/, and this was 
held a promise to answer for the miscarriage of another 
within the meaning of the statute. 

(/) Consideration need not be expressed. — This con- 
tract is an exception to the general rule that ^^ the agree- 
ment or some memorandum or note thereof," which the 
statute requires to be in writing, must contain the consid- 
eration as well as the promise: 19 & 29 Yict. a 97, s. 3.^ 

Agreement m/ide in consideration of Marriage. 

Not a promise to marry. — It is sufficient to note that 
the agreement here meant is not the promise to marry 
(the consideration for this is the promise of the other 
party), but the promise to make a payment of money or a 
settlement of property in consideration of, or conditional 
upon a marriage actually taking place. 

[*61] ^Contract or sale of lands or hereditaments or any in- 
terest in or concerning them. 

What is an interest in land. — It is not always easy to say 
what is an interest in land within the meaning of this sec- 
tion, but it is perhaps safe to say that the contract must be , 
for a substantial interest in land, and not for arrangements i 
preliminary to the acquisition of an interest, or for a remote I 
and inappreciable interest. 

An agreement to pay costs of an investigation of title 
would not be within the operation of the section ; nor would 
an agreement to transfer shares in a railway company 
which, though it possesses land, does not give any appreci- 
able interest in that land to its individual shareholders. The 
whole subject is one which belongs to the sale and purchase 
of Beal Property rather than to the law of Contract 
«. t&ftAid.tia 



Cb^i^ JLiX SIMPLE CONTRACTS, 29 CAR. II. C. 8, § 4. Tl 

Frnetns indastriales et naturales. — The principal qnech 
iion of interest with special reference to the subject relates 
to the sale of crops. A distinction has been drawn as to 
these between what are called emblements or fruotus in- 
dustrialeSy and growing grass, timber, or fruit upon trees^ 
which aro csMed/ructtis naturales. 

Fructtu inditstriales do not under any circumstances con- 
stitute an interest in land. Fructus naturales are considered 
to do so if the sale contemplates the passing of the property 
in them before they are severed from the soiL Where prop- 
erty is to pass after severance both classes of crops are 
goods, wares and merchandise within the meaning of sec- 
tion 17 of the Statute of Frauds, but where property in 
fructus industriales is intended to pass before severance,* 
it is doubtful whether they fall within the meaning of seo- 
tion 17, though it is certain that the sale is not governed by 
section 4J 

Agreement not to he performed within thespaoe of one yeoft 
from the making thereof} t 

Two points should be noted with regard to this form of 
agreement 

(a) It mast contemplate non-performance within the 
7ear. — In order to fall within the section the parties 
must 'contemplate that it should not be performed [*62] 

iL See Benjamin on Sales, p. 100^ M ed. 

1 Schooler in his work on Personal Property, voL S, p. 475, comes to 
■afastantiallj the same oondnsion regarding the American decisions, 
and in them is found the same element of unoertaintj ; the distinctions 
made bj- the court are too refined for an elementary treatise. 

s This subdivision of the statute applies to agreements to marry. Derby 
▼. Phelps, 3 N. H. 515; Nichols ▼. Weaver, 7 Kans. 877; Laurence ▼. 
Oook, 66 Me. 103. A contrary opinion, however, is expressed in Brick 
▼. Qamar, 43 Hun, 68. 

It has been held that this subdivision does not apply to agreementi 
ragarding interests in lands. Toung ▼. Dake, 6 N. T. 407; Whiting t 
OUcrt^ 62 Mich. 46S. 



78 FORMATION OF OONTRACT. Fuxt U 

within the year.' The fact that it may not be, or is not 
performed within the year does not bring it within the opera> 
tion of the statute unless ^' it appears by the whole tenour 
of the agreement that it is to be performed after the year." * 
(h) And by both parties. — The agreement does not fall 
within the section if that which one of the parties is to do, 

a. PBterT. Oompton, 1 Bin. L. O. WSk 

1 Bj a prooees of judicial legislation oTer the term " to be performed," 
this proTision of the statute has been restricted to a Teiy insignificant 
service. The rule is announced that although the agreement is not 
likelj to be performed and not expected to be performed within one year 
from the making thereof, still it does not come within the statute, unless 
it cannot bj anj possibility, within the terms of the contract, be ful- 
fiUed or completed within the space of a year. On this principle the fol- 
lowing classes of verbal contracts have been sustained, though the parties 
evidently contemplated that they would not be performed within a year: 
(a) Contracts wherein performance is to be rendered on the happening 
of some contingency, such as marriage or death of a person, which may 
or may not arise within a year. Houghton v. Houghton, 14 Ind. 606 ; 
Blakeney v. Qoodale, 80 Ohio St. 850; Gonzales v. Cartier, 68 Tex. 86; 
Jones V. Pouch, 41 Ohio St 146; Cole v. Singerley, 60 Md. 848; Heflin 
V. MUton, 69 Ala. 854; Niagara Fire Ins. Co. v. Qreen, 77 Ind. 690; 
Trustees of F. Baptist Church v. Brooklyn Fire Ins. Co. 19 N. T. 806; 
Roberts v. Rockton Co. 7 Met (Mass.) 46; Updike v. Tenbrook, 83 N. J. 
L. 105; Clark v. Pendleton, SO Conn. 495. (b) Contracts to pay mon^ 
from time to time, or to render some service until a specified contin- 
gency arises, as, for instance, to support a person during life, or to ed- 
ucate a child ; for such person may die within the year, on which event 
the contract would be performed. East Tenn. R B. Co. v. Staub, 7 Lea 
(Tenn.), 897, in which the defendant promised verbaUy to retain the 
plaintifF in its employ so long as he should remain disabled fkom an In- 
jury received ; and inasmuch as recovery might happen within a year iv 
was held that the promise was not within the statute. Bell v. Hewitt» 
84 Ind. 280; Harper v. Harper, 67 Ind. 648; Kent v. Kent, 63 N. T. 660; 
Hutchinson v. Hutchinson, 46 Me. 164; Dresser v. Dresser, 86 Barb. 678; 
Blake v. Cole, 33 Pick. (Mass.) 97. (c) Contracts to refrain altogether 
from certain acts, as, for instance, contracts in restraint of trade for an 
indefinite period or for any number of years. Hill v. Jamieson, 16 Ind. 
135; Richardson v. Pierce, 7 R. L 830; Doyle v. Dixon, 97 Mass. 306. 
Such a contract, being only a personal engagement to forbear doing oer- 
tain acts, not stipulating for anything beyond the promisor's life, and 
Imposing no duties upon his legal representatives* would be foUy per- 
formed if the promisor died within the year. 



(SMipwILS^ SIBiPLE CONTRACIS,20GAR.ILa8,§4. 79 

is an to be done within the year.^ So where A being tenant 
to X under a lease of 20 years promised verbally to pay an 
additional £5 a-year daring the remainder of the term in 
consideration that Xlaid out £50 in alterations, A was held 
liable upon his promise, the consideration for it having been 
exeoated within the year.* 

(3) 

The contract. If not in writing, is not void.— It remains 
to consider what is the position of parties who have entered 
into a contract specified in section 4, but have not complied 
with its provisions.' The terms of the section do not render 

iL DonellAa t. Baad, 8 & ft Ad. 899. 

^BonelUn v. Bead has been foUowed in most of the ooarts of our 
oountry. Wood, Frauds, 494; Winten ▼. Cherry, 18 Mo. 800; SmaUey 
▼. Qreen, 83 la. 241; MoClellan t. Sanford, S6 Wia 695; Volke ▼. Flem- 
ing, 108 Ind. 110; Jonee t. Hardesty, 10 GUI & J. (Md.) 404; Berry t. 
DoremoB, 80 N. J. I* 890; Holfarook t. Armstrong, 10 Me. 81 ; Gompton 
T. Martin, 8 Rich. 14. The ooarts of seTeral states, however, have de- 
clined to f oUow this doctrine and hold that, although that which one 
«f tfie parties to the agreement is to do is aU to be done within the year, 
itiD, if the other party's promise is not to be performed within a year, 
it is within the letter and spirit of the statute. Whipple ▼. Parker, 29 
Mich. S75; Sheehy t. Adarene, 41 Vt 641 ; Montague ▼. Qarrett, 8 Bush 
(Ky.), 897; Marqy t. Marcy, 9 Allen (Mass.X 8; Emery ▼. Smith, 46 N. 
H. 161; Lane t. Shackford, 5 N. H. 180; Pierce ▼. Paine, 28 Vt 84 
BRjadweU t. Gestman, 2 Denio, 87; Bartlett t. Wheeler, 44 Barb. 162 
fnj ▼. Sterling, 99 Mass. 461; Wilson t. Ray. 18 Ind. 1 ; McEiroy ▼. 
LBdlum, 88 N. J. Eq. 881; 1 Smith, Lead. CSss. H. ft W. Notes, 486; 
Browne on Stat of IVauds, 289. 

These authorities, while declining to permit the party who has per- 
formed his part of the agreement to enforce the verbal promise of the 
otiier party, gire him a remedy upon the implied atmtmpsit arising from 
Hkb beiiefttB reoeiTed by the def endaat The action should be based not 
upon the oontract but upon the quanhun meruU or quantum valebaL 
Whipple ▼. Parker, 29 Mich. 876. 

* Leroax v. Brown.— In Alabama, CSalif omia, Michigan, Nevada, New 
^otkfingtm and Wisconsin, the statutes expressly proride that certain 
^ wit r acti "shan be voM*' unless ex p re ssed in writing, and in these states 
the rale stated in the text is not, on principle, in force. The objection 
ttuit the eoatnwtwas not reduced to writing woakl go to the 



so FORMATION OK CONTltACT. Part IL 

iuoh a contract void, but thej prevent it being enforced by 
action. The contract, therefore, though it cannot be sued 
upon, is yet available for some purposes. Two illustrations 
will suffice to explain this. 

Bat cannot be proved. — In the case of Leroux v. Brown^^ 
the plaintiff sued upon a contract not to be performed 

a. IS a B. 801. 

•noe of the contract. The statutes of some states, however, are in the 
words of the English statute in this particular. The case of Leroux ▼. 
Brown, 12 C. B. 801, has been followed in Donner ▼. Cheeseborough, 36 
Conn. 89, and quoted approvingly in Pritchard v. Norton, 106 U. S. 134. 
In this case Miller, J., said : '* A contract valid by the laws of the place 
where it is made, although not in writing, will not be enforced in the 
courts of a country where the statute of frauds prevails, unless it is put 
in writing. Leroux v. Brown, 12 C. B. 801. But where the law of the 
forum and that of the place of the execution of the contract coincide 
it wiU be enforced, although required to be in writing by the law of the 
place of performance, as was the case of Scudder ▼. Union Nat. Bank, 
91 U. S. 406, because the form of the contract is regulated by the law of 
the place of its celebration, and the evidence of it by that of the forunu" 
See, also, Hunt v. Jonee, 12 R. L 265 ; Browne on Stat, of Ftauds, secs^ 135, 
186 ; Wharton on Conflict of Laws, sea 690 ; Brandt on Suretyship, sec. 88. 
There is, however, much American authority to the contrary. Story on 
Conf. of Laws, sec. 262 (but see Bennett's note to 7th ed.); Allshouse ▼• 
Ramsey, 6 Whart. (Pa.); Decoeta v. Davis, 24 N. J. L. 831 ; Houtaling t. 
BaU, 20 Mo. 563; Denny v. Williams, 5 Allen, 1; Ailen ▼. Schuchardt, 
10 Am. Law Reg. 13; Low v. Andrews, 1 Story, 38. In none of theoe 
cases is the proposition, announced in Leroux v. Brown, considered. 
They are decided on the assumption that the note or memorandum re- 
quired afifect the validity of the contract. While many of the cases 
involve contracts for the sale of chattels, still the decisions are not based 
on any distinction between the seventeenth and fourth sections, except 
Houtaling v. Ball, 20 Mo. 563, which holds that the words of the seven- 
teenth section, unlike the fourth, relate to the existence of the contract 
Wharton, in his Conflict of Laws, states in substance that while a ver- 
bal contract, valid and enforceable under the lex loci confrocttM, is not 
enforceable in another jurisdiction, where the statute of frauds pre- 
vails, still the converse of this proposition is not true, and that a con- 
tract which, according to the law of the place where it is made, should 
be reduced to writing, cannot be enforced in another jurisdiction where 
no such requirement exists. The case of Donner v. Cheeseborongh, 36 
Gonn. 89, is directly to the contrary, holding that the oonveiM of th« 
proposition, announced in Leroux ▼. Brown, is triMb 



Ghi^IL8& SIMPLE CONTRACTS, 29 CAB. U. as, §4. 81 

within the year, made in France and not reduced to writing. 
French law does not require writing in such a case, and bj 
the roles of private international law the validity of a con- 
tract, so far as regards its formation, is determined by the 
lex loci corUractus. The procedure, however, in trying the 
rights of parties under a contract, is governed by the 2mi 
farij and the mode of proof would thus depend on the law 
of the country where action was brought. If, therefore, 
the 4th section avoided contracts made in breach of it, the 
plaintifiF could have recovered, for his contract was good in 
France where it was made, and the lex loot contractus would 
have been applicable. If, on the other hand, the 4rth 
section affected *procedure only, the contract, though [*63] 
not void, was incapable of proof. 

The plaintiff tried to show that his contract was void by 
English law, in which case he would have been successful, 
for there would have then been nothing to hinder his prov- 
ing first the contract, and then the French law which made 
it valid. But the Court of Common Pleas held that the 
fourth section dealt with procedure only, that the existence 
of the contract was not affected by it, but that it was ren- 
dered incapable of proof, and the plaintiff therefore could 
not recover. 

The second illustration of the rule that a contract which 
does not fulfill the requirements of the statute is not void, 
but merely unenforceable, is to be found in the mode in 
which Courts of Equity have dealt with such contracts. 

They were accustomed to dispense with the evidence re- 
quired by the statute when one of the parties had, under 
certain conditions, performed his part of the contract.^ 

^ When a partj obtains title to land in consideration of an agreement 
on his part, which was to be reduced to writing, but which rests in parol 
through some deception practiced on his grantor, and then, when sued 
npoD his agreement, pleads the statute of frauds, this amounts to a fraud 
against which the court of equity wiU give relief by compelling him to 
perform. When the statute has been used as a cover to a fraud, equity 
will reliere against the fraud, notwithstanding its provisiona. Browne 
on Statute of Frauds, sea 441. 



Qi FORMATION OF CX)NTRACT. FtetH 

Yery recent decisions have narrowed these conditional 
and laid down in very explicit terms the limits within which 
part performance takes a contract out of the operation of 
the statute.^ It may now be considered settled, that proof 
of such a contract will only be admitted where the contract 
IS for an interest in land. 

In Britain v. Rossiter^^ a contract of service, not to be 
performed within the year, was broken by the employer, 
who discharged the plaintiff after some months of servica 
An action was brought for wrongful dismissal; and the 
Court of Appeal held that the equitable doctrine of part 
performance was inapplicable. ^' The true ground of the 
doctrine," said Cotton, L. J., '< is, that if the Court found a 
man in occupation of land, or doing such acts with regard 
to it as would prima fade make hijn liable to an action of 
trespass, the Court would hold that there was strong evi- 
dence from the nature of the user of the land that a con- 
tract existed, and would therefore allow verbal evidence to 
be given to show the real circumstances under which pos- 
session was taken." 
[*64] *Hence the provisions of the Judicature Act/ which 
enable all the Divisions of the High Court to rec- 
ognize and administer equitable rights and remedies, would 
not make this remedy generally applicable to contracts 
falling under 29 Car. II. c. 3, s. a« 

And even in the case of contracts relating to land, it is 
not enough that services should have been rendered in con- 
sideration of a promise to grant lands, or even that the 

a. 11 Q. B. D. isi 
h, S. S4, wakm. 4, 7. 

1 The doctrine that part perf ormanoe takes the contract oat of the op- 
•ration of the statute, subject to various qualifications, has been quite 
generallj foUowed in the American states, though it has been repudi- 
ated in North Carolina, Dunn v. Moore, 8 Ired. Eq. 864; 7*enfi€8f0e, Ridlj 
▼. McNairy, 2 Humph. 174; MitsisgiTppi^ Braman ▼. Buck, 9 S. & M. 
910. But the authorities in support of the doctrine are said to be too 
numerous and too overpowering to admit of its being treated as an open 
qnestioD. Annan ▼. Merrit, 18 Conn. 47Sb 



TLSX SIMPLE CONTRACTS, 29 CAR. H. C. 8, §17. 83 

price should have been paid wholly or in part ^* The act* 
relied on as part performance must be unequivocally and 
in. their own nature referable to some such agreement as it 
idleged.*'-* 

So in Maddison v. Alderson * the House of Lords, afflm^ 
ing the judgment of the Court of Appeal, held that where 
& promise of a gift of land was made to the plaintiff in con- 
sideration of her remaining in the service of the promisox 
daring his life-time, the continuance of service for the re- 
quired period could not be regarded as exclusively referable 
to the promised gift. It might have rested on other consid 
erations, and so the Statute excluded the admission of paro' 
eTidenoe of the promise. 

(Jontr<icU within the severUesnth section. 

The seventeenth section enacts " tliat no contract for the 
sale of any goods, wares, and merchandises for the price of 
£10 sterling or upwards shall he allowed to be good, except 
the buyer shall accept part of the goods so sold and actually 
receive the same; or give something in earnest to bind the 
bargain, or in part of payment; or that some note or mem- 
orandum in writing of th^ said bargain be made and signed 
by the parties to be charged by such contract, or their 
agents thereunto authorized." 

The same questions present themselves here as presented 
themselves under the fourth section. (1) The form required, 
(3) the nature of the contract specified, (3) the effects of a 
iKm-oompliance with the statutory requirements. 

♦(1) ['es] 

BiflTerenee as to form ft*om sec. 4. — With regard to the 
form required, where, in absence of a part acceptance and 

m. PivLQi«8ilbanM.a,iBlUddtooaT.AkteML 
h, tAppi Oa. 479; 7Q. B. D. 174 

'Ckabtn T. Manh, 8S Ohio 8t 881; Webstar t. Onj.W! MkAu 87; 
k T. Toimg, 44 Mioh. 888 ; Ftakham ▼. WiataE, 48 Miok. im 



FORMATION OF CONTRACT. F^rfr TL, 



receipt, or payment, a note or memorandam in writing is 
sorted to, it is sufiScient to say that the rules applicable to 
contracts under section 4 apply to contracts under section 
17, with one exception. 

It is not necessary under section 17 that the consideration 
for the sale should appear in writing. Since the 17th seo* 
tion only applies to contracts for the sale of goods, it will 
be presumed, in the absence of a specified consideration for 
the sale, that there is a promise or undertaking to pay a 
reasonable price, provided always that there has been no 
express verbal agreement as to price which would rebut such 
a presumption.* 

(2) 

Nature of Contract of Sale. — We must not enter here 
into a discussion on the nature of a contract for the sale of 
goods, wares and merchandise in English law, but these 
points may be borne in mind.^ 

c HMdley ▼. M cLftlntt, 10 Bing. 4881 

1 Lee T. Griffin. — What are goods, wares and merchandise under this 
section is a question of much difficulty. 

(a) Stocks.— Under the English decisions it is settled that Btocks, in 
that thej are choses in action and incapable of delivery and acceptance, 
are not within the statute. Humble v. Mitchell, 11 AdoL & EIL 806. 
But in this country it has been repeatedly held that bonds, stoclcB and 
promissory notes were within the statute. Tisdale ▼. Harris, 90 Pick. 
(Mass.) 13; Gooch v. Holmes, 41 Me. 523; Boardmann ▼. Cutter, 128 Mass. 
888. An agreement to take shares in a trading adventure, being merely 
executory, is not required by the statute of frauds to be in writing. 
Coleman v. Eyer, 45 N. Y. 88; Green v. Brookins, 23 Mich. 48. 

(b) Work and labor.— A contract for work and labor is nol within 
the statute ; but where one agrees to manufacture an article for another 
it is often difficult to determine whether the contract is for work, labor 
and material, or for goods, wares and merchandise. 

The early English rule is ** that when the work and labor is the sub- 
stantial object contracted for, although such work and labor is to be ex- 
pended on the materials of the party who is to furnish the article at a 
given price, such contract is not for a sale, and oonsequentty is not 
within the statute,** and that doctrine is said to be incorporated in the 
jwisprudenoe of this ooontry. The case of Lee v. Qrifllii, 1 B. 4t & 978. 



(lHkI],§& SIMPLE OONTBACra, 29 GAR. a G. 8, § 17. 85 

Bargain and Sale. — The Contract of Sale in English law 
Jias the effect of a conveyance, it passes the property in the 
thing sold; but in order to have this effect, the chattel 
agreed to be sold must be ascertained and specific, and noth- 
ing must remain to be done by the vendor to complete the 
chattel, or to ascertain its price by weighing, measuring, or 
testing. Such a contract is called an executed contract of sale. 

Executory agreement to sell. — It is quite possible, how- 
ever, that a contract may be made for the sale of goods 
which are not specific — A agrees to buy any 10 sheep out 
of Xs flock : or which are not complete — A orders a table 
which he sees making in X's shop : or of goods to which 
something remains to be done by way of ascertainment of 
price — A buys X's stack of hay, the price to be determined 
as the hay is taken down and weighed. 

In these cases the property does not pass, the buyer does 
not acquire a right in rem to the thing agreed to be 
!jold, *but only a right in personam against the seller. [*66] 
In like manner, the seller holds at his own risk the 
chattels sold; he is not divested of his property. This is 
called an executory contract of sale. 

When it becomes executed. — But such a contract may 
i)ecoine executed and the property pass, and with the prop- 
erty the risk, to the purchaser, when the chattel is completed 
or its price ascertained, or when specific goods are appro- 
priated to the contract by the vendor. 

So where an order is given for a quantity of goods, and 
the vendor has to appropriate the goodU to the contract^ the 
iQoment of appropriation becomes as important to determine 

ii a departure and cannot be regarded as law in this country. Finney 
▼. Apgar. 81 N. J. L. 270; Meinicke v. Falk, 55 Wis. 427; Parsons v. 
Loucka. 48 N. T. 17: Cooks v. Millard. 65 N. Y. 860; Goddard ▼. Binney, 
115 Mass. 454n Crc>ck(»tt v. Scribner, 64 Me. 447. 

Under the New York rule the distinction is between the sale of goods 
m existence, at the time of making the contract, and an agreement to 
manufacture goods. The former is within the prohibition of the stat- 
ute. Tlie latter is not. Parsons t. Loucks. 48 N. Y. 17; Deal v. Max- 
«^«U, 61 N. Y. 662^ See Edwards ▼. Grand Trunk E. B. 48 Me. 870 



il FOHUAHON OF OONTRACT. 

as the moment of acceptance in a contract made hj co: 
spondence. The appropriation passes the property jvist 
the aoceptance concludes the contract. And the difficulty 
18 to ascertain in each case "^ whether the selection made by 
the vendor is a mere manifestation of his intention whioli 
may be changed at his pleasure, or a determination of his 
right, conclusive on him and no Ipnger revocable."* But 
the question is not one which we can profitably discass 
further here. 

Does § 17 apply to exeeatory contracts of sale! — It was 
long questioned whether the 17th section applied to the 
executory contract of sale, and the matter was not set at 
rest till more than 150 years after the passing of the Statute 
of Frauds. Lord Tenterden's Act, 9 Geo. IV. o. 14, § 7, 
recites, 

'^ That it has been held that the said recited enactments ^ 
do not extend to certain executory contracts for the sale of 
goods, which nevertheless are within the mischief intended 
to be remedied; " and then enacts that the provisions of § 17 
"* shall extend to all contracts for the sale of goods of the 
vahie of ten pounds sterling and upwards, notwithstanding 
the goods may be intended to be delivered at some future 
time, or may not at the time of such contract be actually 
made, procured, or provided, or fit, or ready for delivery, or 
some act may be requisite for the making or completing 
thereof, or rendering the same fit for delivery.*' 

The effect of this clause is to bring executory contracts 
for the sale of goods within the 17th section of the Statute 

of Frauds.* 

[*67] ^Difference between contracts of sale and for 

work and labour. — A further question has arisen, in 

oases where skilled labour has to be expended upon the thing 

sold before the contract is executed and the property trans- 

c BeDjamln on Sales, 264, 8d ed. 

b, Theaeare 89Car. n. o. 8, S 17, and an act of 7 Will, m., whieh applied to IreUnd the 
proTisiona of the En^^lish Statute of Frauds. 

iBennett t. Hull) 10 Johns 864; Edwards ▼• Grand Trunk B. B. 4^ 
lCe.81«. 



ILSH 8DCPLE (X>NTRACIS, 80 CAB. EL a 8, § 17. 91 

ferred, whether the contract is one for work and labour, 
which would not fall under the 17th section; or for goodsy 
wares, and merchandise within tl^e meaning of the section. 
After some conflict of judical opinion it has been laid 
do^wn in * Zee v. O-riffi/n, ^ that the contract is for a sale of 
goods if it contemplates the ultimate delivery of a chattel 
And Blackburn, J., said, '^ I do not think that the relative 
value of the labour and of the materials on which it is be- 
stowed can in any case be the test of what is the cause of 
action; and that if Benvenuto Cellini had contracted to 
execute a work of art for another, much as the value of 
the skill might exceed that of the materials, the contract 
would have been none the less for the sale of a chatteL" 

(8) 

Does § 1 7 differ in Effect ft*om § 4 1— It remains to note 
that if there be no acceptance and receipt, no part payment, 
and no memorandum or note in writing, the section declares 
that the contract shall not '^ be allowed to be good." As to 
the meaning of these words there are conflicting dicta but 
no direct decision. 

In Bailey v. Sweeting ^ a letter admitting a purchase of 
goods was held to be a sufficient memorandum to satisfy 
the statute. This points to the conclusion that the require- 
ments of the statute do not affect the validity of the con- 
tract but only the proof of it: for if the statute avoided a 
contract which did not satisfy its terms, a subsequent note 
of a void transaction must needs be of none effect. 

Yet the Court in Zeroiuo v. Brown^ assumes that the 
words of s. 17, unlike those of s. 4, go to the existence of 
the contract, and judges and text-book writers have ao- 
cepted this distinction. 

Against this we may set a clear expression of opinion by 

a. LB.ftainL 

ft. 9a &N. asm 

& ]SaB^808L 

1 DiH4>proved in Finn^ v. Apgar, 81 N. J. K 870^ and othar OMti 
oted in aole !• p. SB. 



as FORMATION OF CONTRACT. Part U 

Bretty L. J., in Britain v. Eoaaiter,^ and by Lord Blackban 
in the very recent case of Maddison «. Alder%onf that 
[•68] there *i8 no difference in the effect of the two sections. 
And so it may not be rash to say, having regard to the 
decision in Bailey v. Sweeting^ and to the dicta just referred 
to, that the words of the 17 th section do not, anymore than 
the words of the 4th, relate to the existence of the contract, 
but solely to the evidence of its existence which the Courts 
are bidden to require.' 

§ 4. Cbnsideratian. 

Consideration has already been touched upon so far as 
regards the history of the doctrine in English law, and I 
have stated that it is the universal requisite of contracts not 
under seaL What has now to be said must therefore be 
understood to extend to those contracts the discussion of 
which has just been concluded, those contracts which, though 
not under seal, are required by law to be expressed in cer- 
tain forms, or at any rate in writing. 

Definition of consideration. — It will be well perhaps to 
take some general definition of consideration which may 
serve to explain in outline what it is which we are now pro- 
|>o8ing to discuss, and then to lay down certain principles 
upon which the doctrine has been dealt with in English 
law. The fullest definition of consideration is that given 
by the Court of Exchequer Chamber in Carrie v. MUa/ 
^ A valuable consideration in the sense of the law nui^on- 
sist either in some right, interest, profit, or benefit accr uing 
to one party, or some forbearance, detriment, loss, or re- 
sponsibility given, suffered, or undertaken by the other.** * 

«. 11 Q. B. D. 128. 

k 8 App. Ca. 479. 

0. C. B. N. 8. H4a. 

d. Ur. Pollock (Principles of Contract, ed. 4, p. 005) takes this Ttow, saTtag that " th«> 
reight of recent opinion is in favor of holdiUK that notvrithstandinK the dlfferaioe of 
yuiflruage the 17th McUon, like the 4th, fa only a law of procedura." 

c L. a. 10 Exch. 162. 

iGonoTer ▼. StillweU, 84 N. J. L. 54; Glasgow t. HobU, 88 Iii4. iiO. 



IL 1 4. SDCPLB OONTRACr. (X)NSID£aATION. 8tf 

Snoh being the deflnitioa of consideration, we may pro- 
ceed to state — 

General rules as to consideration.— ]. That considera- 
tion is necessary to the Yaliditj of every promise not under 
seal 

^S. ThatOoortsoflawt^^n^^ inquire whether the [*69] 
consideration is adequate to the promise, but mil in- 
sist that it should be something of some value in the eye of 
the law. 

8. That consideration must be legal 

4. That consideration may be present or future, executed 
or executory, but must not be past. 

L Chnsideratian ia necessary to , the validity of every simr 
pUeorUracL 

Doubt as to the doctrine — Settled in Bann t. Hnghes, 
7 T. R. 850.— The peculiar case of PiOans v. Van Mie- 
rep* has already been noticed, and it will be remembered 
Uiat Lord Mansfield, 0. J., and Wilmot, J., there expressed 
an opinion that, among merchants, a promise put into writ- 
ing was binding without consideration. That case was de- 
oided in 1765; and not many years afterwards, in 1778, a 
somewhat similar point arose in the case of Bann v. Etighes. 
There the defendant, as administratrix of the estate of one 
J. Hughes, promised in writing ^^ to answer damages out of 
her own estate.'' There was no consideration for the prom- 
ise, and it was contended that the writing required by 29 
Oar. IL c. 8, § 4, rendered consideration unnecessary.^ The 
▼iew encouraged by Lord Manfield in PiUans v. Van Mierop 
appears to have been, that the presence of consideration was 
one mode among others for supplying evidence of the in- 
tention of the parties to form a contract; and that, if the 
terms of the contract were reduced to writing either by 

fl. 8 BvT. tea. 

1 1^ the statutes of Missouri, California, Iowa, Indiana, Kentucky and 
Zanns, a written instrument is presumptiye eyidenoe of consideration. 
AU writtsn instmmants are. so far, placed on a level with negotiable 



90 FORMATION OF OOl^TRACr. Fwt XL. 

reason of commeroial oostom or of statatory enactment^ 
such evidence was sufficient without consideration* Bat 
this view of the law was, once for all, declared to be incor- 
rect by Skynner, C. B., delivering the opinions of the judges 
in the House of Lords in Bann v. Hughes^ 

*' It is undoubtedly true that every man is, by the law of 
nature, bound to fulfill his engagements. It is equally trae 
that the law of this country supplies no mea/ne nor affords 
any remedy to compel the perform/ince of an agreement 
[*70] made ^without euffioient consideration. Such agree- 
ment is '' nudum pactum ex quo non oritur actio ; " and 
whatever may be the sense of this maxim in the civil law, 
it is in the last sense only that it is to be understood in oar 

law. All contracts are by the laws of England 

distinguished into agreements by specialty and agreements 
by parol; nor is there any such third class as some of the 
counsel have endeavoured to maintain, as contracts in writ- 
ing. ^ they he m^rdy written and not specialties^ they are 
parol and a consideraHon must he proved?^ 

Bills of exchange and promissory notes no real exee]h 
tion. — Bills of exchange and promissory notes are an ap- 
parent but not a real exception to the universality of this 
rule. In contracts of this nature consideration is presumed 
to exist and need not be proved by the plaintiff. The bur- 
den of proof rests on the party disputing the validity of the 
contract. If, however, he can show that, as between him- 
self and the party suing, no consideration was gi'ten for the 
making or indorsement of the bill or note, the promise 
fails, as it would do in any other case of simple contract 
under like circumstances. 

2. Courts of loAJD will not inquire whether or no the con- 
sideraiion he adequate to thepromiscj hut they will insist that 
ii he something of some value in the eye of the law. 

Adequacy of consideration. — In other words, consider- 
ation need not be adequate, but must be real So long as a 

«. 7T.B.8B0. 



Chap.a§i. SIMPLE (X)NTRACT. (CONSIDERATION. 01 

man gets what he has bargained for^ Courts of law will not 
ask what its value maj be to him, or whether its value is 
in any way proportionate to his act or promise given in re- 
tarn. This would be '^ the law making the bargain, instead 
of leaving the parties to make it." ' Further than this, they 
will not ask whether the thing whioh forms the considera- 
tion does in fact benefit the promisor, or a third party, or is 
of any substantial value to any one. It is enough that 
something is promised, done, forborne, or suffered by the 
party to whom the promise is made, as consideration for 
the promise made to him.^ 
♦The following cases will illustrate this principla [*71] 
A gave permission to Xto weigh two boilers, the 
property of J., and X in consideration of this permission 
promised A to return them in as good condition as he re- 
ceived them.* A sued Xfor non-fulfillment of this prom- 
ise; X had in fact taken the boilers to pieces in order to 
weigh them, and had returned them in this condition. 

It was argued that the permission to weigh the boilers 
was neither detriment to the plaintiff nor benefit to the de- 
fendant, and so was no consideration which would support 
Xs promise. But Lord Denman, 0. J., said '^ the defendant 
had some reason for wishing to weigh the boilers; and he 
could only do so by obtaining permission {rom the plaintiff, 
which permission he did obtain by promising to return 
them in good condition. We need not inquire what benefit 
he expected to derive. The plaintiff might have given or re- 
fused permission." ' 

fl. Alderaon, B., POkliietoii t. Soott, 15 M. A W. 600. 
k. Bainbrldge ▼. Firmstono, 6 A. ft B. 74S. 

■Lawrence ▼. McCalmot, 2 How. 426; Worth ▼. CSase, 43 N. Y. 862; 
Naah ▼. Loill, 102 Maas. 60. But it has been held that the doctrine that 
uiadeqoacy of consideration will not vitiate an agreement does not ap- 
ply to a mere exchange of sums of money, where value is exactly fixed, 
bat to the exchange of something, in itself, of indeterminate value. 
Schnell t. Nell, 17 Ind. 29, where it is said that the consideration of one 
cent wiU not support a promise to pay $600. 

> After a party has received the full benefit he contracted for, which 
tefcr the contract he would not have received or hma entitled to de- 



09 FORMATION OF GONTRAGT. Pm 1L 

A like authority is Haigh %>. Brooks.^ The defendant lo 
that case promised payment of oertain bills accepted by M 
in oonsideration that the plaintiff would return to the de- 
fendant a guarantee which he had given for the payment 
of £10,000 by Jf to the plaintiff. The guarantee was re- 
turned: it then turned out to be unenforceable under 39 
Car. 11. c. 3, § 4, and the defendant argued that it was there- 
fore no consideration for his promise. Lord Denman, how- 
eTer, in giving judgment for the plaintiff, said, ^^ Whether 
or no the guarantee could have been available within the 
doctrine of Wain v, WarUerB^ the plaintiffs were induced 
by the defendant's promise to part with something which 
they might have kept, and the defendant obtained what he 
desired by means of that promise. Both being free and 
able to judge for themselves, how can the defendant be 
justified in breaking this promise, by discoTcring afterwards 
that the thing in consideration of which he gave it did not 
possess that value which he supposed to belong to itt It 
cannot be ascertained that that value was what he most re- 
garded: he may have had other motives andobjectSy and of 

their weight he was the only judge.^ 
[«72] ^Inadequacy of consideration in equity.— But 

adequacy of consideration is taken into account in 
granting the use of the equitable machinery for the enforce- 
ment or setting aside of contracts. It has been held that 
inadequacy of consideration is a ground upon which specific 
performance may be resisted. There is some conflict of 
judicial opinion upon this point, but it is probably safe to 
adopt the Tiew of Lord Eldon, that mere inadequacy of con- 
sideration, unless so gross as ^^ to shock the conscience and 

«. 10A.AS.80I. 

». 5E— t,ia 

mand of the promisee, he wiU not be heard to say that it was of no 
Talue; as, for instanoe, where one obtains the plans for the organisation 
of insorance oompanies, on a promise to paj for them, he cannot defend 
against an action on the promise on the groond that there is no law in 
the state authoriiEing the formation of sudh oompanies. Gotes t. Bates, 
78 Ind. 286; Hale Mfg. Ck>. t. Amer, B*7 SnppljOo. 48 Mioh. 881; 
Moond Gitj Land and Water Aas'n t. fiDansen, 85 OaL 48S. 



Chap. n. S 4. CONSIDERATION. «8 

■moiint in itself to conolasive evidenoe of fraud," is not 
alone a snfficient ground for refusing specific performance.^ 
Undoubtedly if a contract is sought to be avoided on the 
ground of Fraud or XJndae Influence, inadeqaacy of consid- 
eration is regarded as corroborative evidence in support of 
the suit* 

Consideration most be real. — ^Although Courts of Law 
will not inquire into the inadequacy of consideration, they 
will insist that it should not be illusory or unreal At first 
sight this looks like saying that a consideration must be a 
consideration; but it may not be useless to inquire into some 
of the various forms which consideration may assame, and 
to note the grounds upon which certain alleged considera- 
tions have been held to be of no real value in the eye of the 
law. 

The consider (xtion for a promise may he an act or a forbear- 
anoey or a promise to do or to forbear. 

A promise^ or executory consideration.— When a prom- 
ise is given for a promise the contract is said to be made 
upon an executory consideration; the obligations created 
by it rest equally upon both parties; each is bound to a 
future act. The simplest illustration of such a contract is 
the case of mutual promises to marry, in which the consid- 
eration for J.'s promise to marry X is ^s promise to marry 
Ay while J.'s promise forms in like manner the considera- 
tion for JTs.* 

«.Col«T.Tk«ooChiok,9VakSM; PoUook on Oont 081. 

1 Waterman ▼. Waterman, 27 Fed. Rep. 827; Conawaj t. Sweeney, 
94 W. Yirg. 648; Conrad ▼. Schwamb, f^ Wis. 878; Shaddle ▼. Diaboi^ 
oagh, 80 N. J. Eq. 870; Beady ▼. Noakes, 29 N. J. £q. 497; Cathcart 
▼. Bobinaon, 2 Pet. 263; Br win ▼. Pasham, 12 How. 197; QaUowaj t. 
Bur, 12 Ohio, 854. 

' Mataallt/.— Mutual promisee, to be obligatory, must be simultane- 
008. The rules of proposal and aooeptanoe govern the creation of con- 
kacts by mutual promises. Keep ▼. Qoodrich, 12 Johns. 897 ; James ▼• 
Fulcrod, 6 Tex. 512; Wightman ▼. Coates, 15 Mass. 1; LdYingstone t. 
BogerB, GoL & Can. Oases, 881; Buckingham ▼. Ludlum, 40 N. J. Eq. 
4»; Missouri Bank ▼. Sahin, 48 Vt. 289. When the only considenitioa 



M FORMATION OF CONTRACT. P^ft IL 

An act or forbearance^ or consideration execnted«-« 

When the consideration for a promise is an act or forbear- 
ance, the contract is said to be made npon consideration 
ezecnted. This arises when either the offer or the accept- 
ance is signified by one of the parties doing all that 
[*73] he is *bound to do under contract so created. The 
validity of consideration, as regards its relation to 
the promise in time, may be discussed presently: we are at 
present concerned with the nature of consideration. 

Contingent contracts. — Where the consideration for a 
promise is a promise, the whole contract may be contingent 
and may never come into effect save at the will of one of 
the parties. For instance, A offers to supply at a certain 
price such goods as Xmay choose to order. X accepts 
this offer. If X calls upon A to supply goods on the terms 

to Bustain the contract is that arising out of matual promisea, the mat* 
nality most be absolute so that each party may have an action in caas 
of breach, or neither is bound. Ennis ▼. Gordon, 49 N. H. 444 ; Keep r. 
Goodrich, 12 Johns. 897; lAmoreaux t. Gould, 8 Seld. 849; Dreeet t. 
Jordan, 104 Mass. 412; Jennoss ▼. Mt. Hope Iron Co. 58 Me. 20, 28; Wil- 
kinson ▼. Heavenrich, 68 Mich. (r76. For a consideration of the ezcef^ 
tions to this rule where one of the contracting parties is an infant or aii 
agent acting without authority, see 1 Chitty on Contr. (Uth Am. ed.) 

p. 2a 

Subscriptions.— An iUustration of mutual promises is Toluntary 
subscriptions, to promote some improvement in which the subscribers 
have a common interest. The promises are generally held binding, 
where something: has been done or some liability or duty assumed, in 
reliance upon the subscription, though no pecuniary advantage result 
to the promisors. Many authorities, however, sustain the subscriptions 
on the doctrine of mutual promises. They support each other, in thaft 
each is made in reliance upon the others. Ohio Weeleyan Female Col- 
lege ▼. Love, 16 Ohio, 20; Johnson v. Ollerwcin University, 41 Ohio Si 
527; Whitsett v. Pre-emption Pres. Church, 110 111. 125; Pryikr v. Cain. 
85 m. 292; McQure v. Wilson, 48 m. 861; Underwood v. Waldron, 18 
Mich. 78; Conrad v* La Rue, 53 Mich. 86; Culver v. Banning 19 Minn. 
809; Barnes v. Ferine, 12 N. Y. 18; Trustees Troy. Conf. Academy t. 
Nebon, 24 Vt. 189; Qiristian College v. Hendley, 49 Cal. 847. The view 
expressed in The Trustees of Hamilton College t. Stewart, 1 Comst 
(N. Y.) 581, that the subscriptions could not be sustained on the mutual 
promises of the subscribers, is criticised in Latim^ r. Knapp, 97 Wla. 
tl4; Hegert v. Indiana Asbury University, 58 Ind. 828. 



Oi^ILgi. CONSIDERATION. M 

fixed, A cannot refuse to do so on the ground that Xwas 
not bound to order any goods at alL The contract may be 
put in this form:' — In consideration that X promises to 
pay A a certain price for his goods if he requires them, A 
promises to supply goods at that price if called upon to 
do so.* * 

The peculiarity of the case just cited consists in the op- 
tion given to one of the parties to bring the contract into 
operation, or to leave it dormant irrespective of the wishes 
of the other. But the consideration is not altogether illu- 
aory. The promisee need not bring the contract into effect 
at all, but, if he do so, he is bound by its terms as to price. 

Conditional promises. — Similar in character are the con- 
siderations which consist in conditional promises. A prom- 
ises to do something for reward, but X only binds himself 
to pay for it upon the happening of an event which may 
not be under the control of either party. Such would be 
the case in a building contract, where the promise to pay 
for work to be done is made conditional on the certified 
approval of an architect Or again, the promise may 
be conditional on something not ^happening; such [*74] 
are the promises in a charter-party which are not to 
take effect if certain specified risks occur. 

In the one case the promise depends for its fulfillment 
upon a condition precedent, in the other it is liable to be de- 
feated by a condition subsequent; in neither case does its 
contingent or conditional character prevent it from forming 
a good consideration for promises given in return. 

Bat consideration need not necessarily consist of acts or 

&Q.N.BafIwajOo. t. Witham, L. R. 0. P. 16. 

6. The ^'"tf**^" Uw to different from oun upon this point (see Benjamfa upon 
Selea, p. 6^ It is noticeable thnt Brett, J.« in his Judgment in the caae cited In tlw 
texti Utkwm It uncertain whether he regards the contract as based upon mutual prom- 
iHS dependent upon a contingencj for their coming into effect, or whether he rests it 
■poa an ontslandlng offer to supplj goods which each succeeslTe order accepts and so 
tons tmo a oontrsct pro tanfo. Mr. Leake, ed. S, p. 46, takes the latter view. 

^Ckmtra^ The Chicago & Great Eastern B. B. Co. ▼. Dane, i8 N. T. 
910; amifthT.WeaTer. 90 111802. See Craig t. Harper, 3 Cudiu IM 



M FORMATION OF CONTRACT. Put O. 

promises which the party furnishing the Consideration was 
not otherwise liable to do or make: it may oonsist in a for 
bearance or promise to forbear from doing what he was 
otherwise entitled to do. 

Forbearance. — Thus the abandonment of a right, or a 
promise to forbear from exercising it, is good consideration 
for a promise. The right may be legal or equitable, cei^ 
tain or doubtful; it may exist against the promisor, or 
against a third party; but it must at least be doubtful; for- 
bearance to enforce an unenforceable claim can be no con- 
sideration for a promise.^ 

In JonM V. ABhbuTnkara * the plaintiff sued on a promise 
to pay money, the consideration being a promise by huu 
not to sue for a debt due from a third party deceased. It 
did not appear from the pleadings that there was a repre- 
sentative of the deceased against whom the claim could be 
made, or assets out of which it could be satisfied. ^ How,' 
said Lord Ellenborough, ^^does the plaintiff show any dam- 
age to himself by forbearing to sue, when there was no 
fund which could be the object of suit, where it does not 
appear that any person m rerum natura was liable to him? 
No right can exist in this vague abstract way." 

Compromise of suits. — The commonest form in which 
a forbearance appears as consideration for a promise is in 
the compromise of an action. A the plaintiff promises JT 
the defendant that in consideration of certain things to be 
done by X he will forbear to prosecute his suit; and this is 
good consideration for the act or promise of X But 
[*75] here, in order to make the ^forbearance a considera- 
tion, the plaintiff must believe in his case. In Wcui^ 
V. Simeon * it was held that forbearance to proceed in an ac- 

KiaB.548. 

1 Sharp ▼. Rogers, IS Minn. 174; Hant ▼. Johnston, 88 Mo. 482; Lont^ 
▼. TowU 42 Mo. 645; Prater ▼. Miller, 26 Ala. 821; Danaon ▼. Font 28 
W. Ya. 617 ; Everringham ▼. Meighan, 66 Wia. 854; Smith ▼. Eastoa, 64 
Md. 188. Simple forbearance is InBofficient, though it may hare been 
iiidaoed bgr the fnmm^ Then nuiet be a pcwnise to forbear, f oUoiwed 



n. 8 4 UNHEAL CX)NSID£RATION. tV 

tion knowingly brought without cause is no consideration 
for a promise. 

Plaintiff must bellere In his ease. — Therefore the 
plaintiff must believe that he has a case, and must intend 
bona fde to maintain it by action. If he does so, the fact 
that he has in truth no cause of action, and that the defend- 
ant knows that he has none, will not invalidate & com- 
promise, whether made before or after the commencement 
of litigation.' Where a man was threatened with legal 
proceedings because the plaintiff believed that he was liable, 
and he, though he knew that he was not liable, gave prom 
issory notes to avoid being sued, he was held to be bound 
by his promise. The plaintiff had abandoned a claim which 
he believed to be enforceable, and meant to try and en- 
force:* the defendant escaped the inconvenience and anxie- 
ties of litigation, and the compromise was deemed to be a 
sufficient consideration for the notes. In a later case the 
law upon the subject is thus stated by Cockburn, 0. J. : '^ If 
a man honajide believes he has a fair chance of success, he 
has a reasonable ground for suing, and his forbearance to 
do so will constitute a good consideration. When such a 
person forbears to sue he gives up what he believes to be a 
right of action, and the other party gets an advantage, and 
instead of being annoyed with an action he escapes from 
the vexations incident to it. It would be another matter if 
a person made a claim which he knew to be unfounded, and 
by a compromise obtained an advantage under it: in that 
case his conduct would be fraudulent." * 

& Cook T. Wright, IB. ft S.BM. 

ft). OftlUshflr ▼. Biflohofbbaim, Lu R. 5 Q. B. 448. 

hj actaal forbearance for a reasonable time. Mauler ▼. Churchill, 197 
MaaB. 81; BrowneU ▼. Harsh, 29 Ohio St. 681. 

iMcKinley ▼. Watkins, 18 lU. 140; Grans ▼. Hanter, dS N. Y. 894; 
Caark ▼. Tumbull, 47 N. J. L. 265; BeUows ▼. Souls, 55 Vt. 891; Flan- 
nagan ▼. EUcome, 58 N. H. 448; Van Dyke t. Davis, 2 Biich. 145; Gates 
▼. Shults, 7 Mich. 126; Parker ▼. Enslow, 102 DL 277; Wehram r. 
Knhn, 61 N. Y. 628. But it is said that the daim must be at leart 
doubtful, '' a bona fide daim under color of right" There must be a 
fnasonsble ground for belief in the Taliditj of the olaim oompromiMd. 
7 



M FORMATION OF CONTRACT. Fmrt H 

Qaestions have been raised as to the length of time over 
which a forbearance to sue must extend in order to consti- 
tnte a consideration.^ It has even been held that a promise 
of forbearance for an unspecified time was no considera- 
tion. But it may now be regarded as settled * that a prom- 
ise of forbearance, in order to form a consideration, need 
not be a promise of absolute forbearance, nor even of 
[*76] forbearance for *a definite time; where no time is 
mentioned, a reasonable time will be implied, and 
where no express promise is made, an actual '^ staying of 
the hand of the creditor " is consideration for the transfer 
of documents of title.* The most recent authority for this 
proposition is the case of Zeask v. Scott* 

Extent of forbearance needed. — The defendants were 
vendors of a cargo of nuts. X, the purchaser of the cargo, 
was indebted in large sums to the plaintiffs, and, on ap- 
plying for a further advance, he was told that it could only 
be made if he would promise to give cover, i. «., security. 
Xpromised cover, received an advance, and some days after 
deposited with the plaintiff, among other securities, the bill 
of lading for the cargo of nuts. X became insolvent, and 
the defendants sought to stop the nuts in transitu. The 
right of stoppage in transitu cannot be exercised against 
the transferee of a bill of lading for consideration. It was 

a, Semple ▼. Pink, 1 Exch. 7i. 

». OldenliawT.Kliig,8H.ft N.617. 

«. 1 Q. B. D. «7«. 

MulhoUand ▼. Bartlett, 74 01. 63; Ware ▼. Morgan, 67 Ala. 461 ; Ecker 
▼. McAllister, 54 Md. 878; Logan ▼. Mathews, 6 Pa. St 417; Gates t. 
Sholts, 7 Mich. 126. This test is not usually insisted upon, especially in 
oases of compromise after suit brought A discontinuance of the suit, 
commenced in good faith, is a sufficient consideration without regard to 
the validity of the claim in suit Jones t. Rittenhaur, 87 Ind. 848; 
Flannagan ▼. Kilcome {supra), 

1 The promise to forbear need not be a promise to forbear for a definite 
time, if followed by actual forbearance for a reasonable time. Howe ▼. 
Taggart, 188 Mass. 284; Bowen v. Tipton, 64 Md. 276; Dunning ▼. Funk, 
6 Rawle (Pa.), 69; EUing ▼. Vanderlyn, 4 Johns. 287; King ▼. Upton, 4 
Me. 887 ; Rood ▼. Jones, 1 Doug. (Mich.) 188. Contra, Qamett ▼. Kirk- 
man, 88 Miss. 888. 



Qii^. IL § i. UNREAL CONSIDERATION. M 

arged for the defendants that the consideration in this oaae 
was past, being the advance made some days previous to 
the assignment of the bill of lading: but the Court of Ap- 
peal held that there was a present consideration for the 
iissignment " An action would lie for not covering. There- 
fore the assignor for such a consideration as this always 
gets the benefit of performing his contract and so saving 
himself from the cause of action. The consideration for 
the assignment of the bill of lading was in effect a forbear- 
ance to sue for an indefinite and unspecified time: the 
assignment being part performance of a contract on which 
action might be brought at any time, it stayed the hand of 
the creditor," • 

^Bailment. — Among cases where an act is the [*77] 
consideration for a promise, it is worth while to no- 
tice the kind of contract which arises upon the mere plac- 
ing or leaving of property in the hands of a bailee or 
depositary. This will create an implied promise to use rea- 
sonable care in the safe custody of the property find will 
support an express promise to undertake certain services in 
respect of it. Thus, where A allowed two bills of exchange 
to remain in the hands of X, and X promised to get the 
bills discounted and to pay the money to jI's account, this 
promise was held to be made upon good consideration, 
namely the permission given to the defendant to retain the 
bills.* 

Unreal eonsiderations. — To discuss further the forms 
which consideration may assume would be to enter upon 

a. TbB €Me olted, though a good illuftntkm of fortMarsnoe u a oonddeimtloii, to bj 
BO metam tree from diffloulty. If ** the creditor" wu entitled to an Immediate pei<> 
tonammoB of the promise to give oorer, the debtor, In Indorsing tolhlm the bill of laA 
Ing, did DO more than he was legally bound to do. If this be so, there was no coosIA 
ttiatioB for the forbearance, and the whole of the contract, In which the forbeamnoa 
li the eonsideration for the assignment of the bill of lading, seems to Call to pieces 
It might hftTe seemed a more simple solution of the dlfflcul^ to have regarded ths 
perfomanoe of the promise to give cover as a part of the consideration for the ai^ 
vaaee, for although It took place as a matter of fact oa a later daj, It was i 
Hally part of the saoae transaction. 

h. H^^T. lOlsa. 4 a B. N. & m. 



100 FOBMATION OF CX>NTRACT. Put II, 

an analysis of the possible subjects of contract. It remains 
to point out certain semblances of consideration which the 
Courts have refused to allow to support a promise. They 
may be said to fail, roughly speaking, under three heads. 

(a) Motire. — Cases in which motive has been confounded 
with consideration, that is to say, cases where a man has 
promised to do a thing, not for any benefit to himself, but 
because he wished it to be done or thought that it ought to 
be done. 

(b) Impossibility and ragueness. — Cases in which the 
alleged consideration has been a promise to do a thing ob- 
viously impossible in fact or in law; or a promise the per- 
formance of which, from its vague and illusory character, 
it is impossible to secure. 

{o) OlTering a man what he can already legally de- 
mand. — Cases in which the alleged consideration has been 
the doing or promising to do what a man was already bound 
to do, so that the promisor got nothing but what he was 
already entitled to get before the consideration was offered. 

(a) Motive. — Cases have arisen which make it necessary 
to distinguish motive from consideration. ^^ Motive is not 
the same thing with consideration, consideration 
[*78] means something *whioh is of value in the eye of the 
law, moving from the plaintiff." • The confusion be- 
tween motive and consideration has taken two forms; the 
distinction which once existed between good and valuaUs 
consideration; and the view once maintained that a moral 
obligation was sufficient to support a promise. 

Good consideration. — The first of these probably origi- 
nated in the Chancery, where a covenant to stand seised 
was held (before the Statute of Uses)* to raise a use, if the 
person in whose favour the covenant was made stood within 
a certain degree of consanguinity to the covenantor. Such 
relationship was of itself a consideration for the covenant. 



«. PlMvMa, J.,lnllMnMT.1!b0BM.tQ.B.»» 

ft).sr]iM.vm.aia 



Chi^ n. g 4 UNREAL CX>NSIDEBATIOM. 101 

•nd blood or good consideration oame to be distinguished 
from vMMy or valuable consideration which supported the 
use arising from Bargain and Sale. At the present day, 
although a covenant to stand seised would, by virtue of the 
Statute of Uses, create a legal estate, an estate cognizable 
by the Common Law Division of the High Court, the con. 
Bideration of hlood^ or good consideration is still required to 
rapport the covenant.* 

As applied to contract. — In some early cases it waa at- 
tempted to extend this principle to the law of contract 
The mere existence of natural affection as a motive for a 
promise was never held to amount to a consideration j ....^ ; 
"natural affection is not sufficient to^ratse an att{i^jp8tt\ :'.\ *• 
without a quid jpw^jwJ'*^ fiut/it]\«¥*';«t:oii9/ttoafe*mld *' 
down that where ^;iqa(lea-)nflding*pfomise to X to do 
something for the benefit of JTs son or daughter, the near- 
ness of relationship would entitle the person in whose favour 
the contract was made to sue upon it.* 

ThiS| however, is no longer law. Nearness of relation- 
ship to one of two contracting parties, and the fact that the 
contract was made for the benefit of the plaintiff, give no 
cause of action if the plaintiff was no party to the contract 

The point is connected rather with the effect of a con- 
tract,' than with the nature of consideration, but it serves 
to illustrate the form which the doctrine of good considera- 
tion took in the Common Law Courts, and to explain 
the saying quoted *above, that consideration must [*79] 
moM from the plaintiff} The phrase means no more 
than this, that when a man sues upon a promise he must 
show that the consideration for which the promise was 
nuule was some benefit conferred or detriment sustained by 

m, Bai^m on OMnrvyMioiiig, 1, 89, ■• 

k BM ▼. J. a *Dd wife, 1 era TSB^ 

& Dnilos ▼. Poole, 8 Let. SIO. 

d. Twe(ldleT.Atkiiu<»i,lB.A&308L See Piut m, eh. L 

>Stowwi ▼. Trasteesof HamiHon GoUef;e, S Denio, 408; Tobey t, 
WanhaaBank, 18 Met (Man.) 440; Jordan t. WUwyii, 6 Ii6(L(N. 0.)4Mk 



lot fobmahon of oontraot. Ptet Hi 

himself; in other words, that strangers to a contract do 
not acquire a right to sue upon it because they happen to 
be interested in its performance. 

(2) Moral obligation, under certain aspects, was once ro» 
garded as a consideration for a promise. A man may 
believe himself to be under a moral obligation either be- 
cause he has received actual benefits in the past, or from 
motives of pietj, delicacy, or friendship. Now a past con- 
sideration is in truth no consideration at all, inasmuch as 
the promisor does not receive a benefit, nor the promisee 
incur a detriment, in return for the promise. There are 
,^^^ certain cases, however, in which an advantage derived in 
/; .tbecj^t; v^ill support a subsequent promise. These shall be 
" dealt wrth When; w4do^StQ. *draw. the distinction between 
executed and past 6on^id6tat9?h.f : y' 

Arising from past benefits. — It is 'sufficient to say here 
that the validity of such promises will be found to rest 
upon another basis than that of moral obligation, and that 
the phrase, which was of common use in the Common Law 
Courts at the end of the last and be<;inning of the present 
century, has had an unhappy and obscuring infiuence upon 
this branch of the law of contract. The question was set- 
tled once for all in the case of Eastwood v, Kenyon^^ and a 
final blow given to the doctrine that past benefits would 
support a subsequent promise on the ground of the moral 
obligation which rested on the promisor. ^' The doctrine,** 
said Lord Denman, '^ would annihilate the necessity for any 
consideration at all, inasmuch as the mere fact of giving a 
promise creates a moral obligation to perform it." 

Arising ft-om honourable or conscientious scruples. — If 
the actual receipt of a benefit in the past does not consti- 
tute consideration for a consequent promise, still less will 
such duties of honour, conscience, or friendship as a man 
may conceive to be incumbent on him. A man maj 
[*80] be said *to be morally bound to support his children 
in a manner suited to his own condition and ezpendi- 

m. See p. 89. 



Chap. n. S 4 UNREAL CONSIDERATION. 108 

tare, but the law creates no such obligation, and it is con- 
oeired that a promise by a father to his son to pay the 
son's debts would not be binding* A man is bound in 
honour to pay money lost in a wager, but inasmuch as the 
law has declared wagers to be void,* a promise to pay such 
a debt would be unenforceable for want of consideration: 
and in like manner a pious wish on the part of executors 
to carry out what they know to be the intentions of the 
testator^ affords no consideration for a promise lade by 
them for such an object.^ 

Indian Contract Act, § 25. — It is worth nothing that 
the Indian Contract Act, in dealing with this subject, differs 
from the rule of English law in two particulars. It up- 
holds promises made in consideration of natural love and 
affection where the parties are nearly related and the prom- 
ise written and registered. It also upholds informal prom- 
ises to make compensation to persons who have already 
conferred some benefit upon the promisor, or voluntarily 

tL Moittmore ▼. Wright, 6 M. AW. 488; R.T. Downs, 1Q.B.D.A. 

h. 8ft9Vlete.lOO,|18w 

«. FiattenoB, J., in Thomas t. Thoross, 8 Q. B. 86t 

1 A moral obligation is insufficient to support a promise unlesa thert 
waa a pre-existing obligation which has become inoperative by positive 
law. MiUs ▼. Wyman, 8 Pick. 207; Cook ▼. Bradley, 7 Conn« 67; 
Loomisv. NewhaU, 15 Pick. 159; Updyke ▼. True, 18 N. J. £q. 161; 
Ehle ▼. Judson, 24 Wend. 97; Schroeder ▼. Fink, 60 Md. 486; Murphy 
Estate, 11 Phila. (Pa.) 2 ; Snyder ▼. Outhrie, 21 Hun, 841 ; Osier ▼. Hobbs, 
88 Ark. 216; Turlington ▼. Slaughter, 64 Ala. 195; Gay ▼. Botts, 18 
Bosh (Ey.), 299; McEIven ▼. Sloan, 66 Oa. 208; Gordon ▼. Gordon, 66 N. 
H. 170; Philpot ▼. Gruninger, 14 Wall. 670, in which the distinction be- 
tween motive and consideration is considered ; Famham v. O'Brien, 22 
lie. 475. There are a few old cases in accordance with the early Eng- 
lish rule, that a moral obligation is sufficient to support a promise. 
Howley Y. Farrar, 1 Vt. 178; Glass v. Beach, 6 Vt. 178; Oark v. Her- 
ring, 6 Binn. (Pa.) 83; but see Musser v. Ferguson, 66 Pa. St. 476; Leon- 
ard V. Duffin, 94 Pa. St. 218; Stebbins v. Grawford Ck>. 92 Pa. St 289. 

Grata! toas services.— Services rendered without the privity or re- 
quest of the party benefited, or without any expectation of receiving 
compensation therefor, are not sufficient consideration for a subsequent 
piomise to pay for them. Bartholomew v, Jackson, 20 Johns, 26 ; Allan 
V. Bryaon, 67 la. 691- Osier v. Hobbs. 88 Ark^ 216. 



104 FORMATION OF OONTRAOT. Ftet XL 

done something whiok the promisor was legally compelli^ 
ble to do. It thus recognizes the motives of natural affec- 
tion (subject to certain forms) and gratitude as forming 
consideration for a promise. 

In French law, eatise the equivalent for consideration^ 
has a yet wider meaning;* it includes not merely motives 
of gratitude, but sentiments of honour and scruples of con* 
science. It may, however, be regarded as certain that, in 
English law, motive, whether it take the form of natural 
affection, gratitude for past services, feelings of honour or 
of piety, is in no case such consideration as will support a 
simple contract. 

I 

(i) Impossibility and vagueness. — Ck>urt8 of law will 
also hold a consideration to be unreal if it be impossible 
upon the face of it or so vague in its terms as to be prac- 
tically impossible to enforce. 

In dealing with impossibility regarded from this point of 
view, we .must guard against being understood to 
[*81] mean anything *more than a prima facie legal impos- 
sibility, or a thing physically impossible '' according to 
the state of knowledge of the day." * Practical impossibil- 
ity unknown to the parties when they entered into their 
contract may avoid it on the ground of Mistake. Impossi- 
bility of performance arising subsequent to the making of 
the'contract may under certain circumstances operate as a 
Discharge. But we are here concerned with promises to do 
a thing so obviously impossible that the oromise ean form 
no real consideration. 

For a legal impossibility we may take the case of Harvey 
V. Oibbona.^ There the plaintiff was bailiff to J. S. and the 
defendant was debtor to J. S. to the amount of £20. The 
defendant in consideration that the plaintiff would discharge 
him the £20 due to J. S. promised to lay out £40 on a barge 
of the plaintiff. The Court held that the consideration was 

«. DalloB, Bepertotre, toI. 8S, p. IBi 

k FvBMtt. J.,inCUaordT.WftMi.L.a9aP.aHL 



/ 

n. S 4 X7NBEAL CX)NSIDERAnON. 105 

** jnegalf" for the servant cannot discharge a debt dae to his 
master. By illegal we must understand legally impossible, 
for illegality, in the strict sense of the term« there was 
none.^ 

Of contracts void because the consideration for the prom- 
ise involves a physical impossibility we can furnish no de- 
cided case. We may take an illustration from Gains: — 

^ Si quis rem quae in rerum natura non est aut esse non 
potest velut hippocentauram stipuletur, inutilis est stipula- 
Uo."* 

Or from the Indian Ck>ntract Act: — ^ 

A agrees with X to discover treasure by magic. The 
agreement is void. 

Yagneness. — Again, a consideration may be unreal on 
the ground of impossibility where it is a promise so vague 
as to be virtually unenforceable.' The case of White v. 
Blttett* exemplifies this rula This was an action brought 
by executors upon a promissory note made payable to the 
testator by his son, the defendant in the action. The son 
pleaded a promise made by his father to discharge him 
from all Uability in respect of the note in considerar 
tioQ of his ceasing to make certain ^complaints [*82] 
which he had been in the habit of making, to the ef- 

fl. Gaiiii.t.9r. 

k Ind. Oont Aet. | OS. 

«. tS L. J. Ezch. 86; S 0. L. R. 80L 

1 It is eaid that the f oUowing U an example of a oonsideratioii involv- 
ing a legal impoeeibilitj ; an undertaking " that plaintiff's tract of land 
•hall eeU for a certain sum by a given day." Certainly no man can in 
legal contemplation force the sale of another's property by a given day, 
or by any day, aa of his own act Stevens ▼. Ckwn, 1 Pinney (Wis.), 
857. 

STolmlev. Dean, i Wash. T. 67; WaU's Appeal, 111 Pft. St 460. The 
principle, id cerium est quod eertum reddi potest, is generaUy applied in 
clearing up any uncertainty there may be in the promise which favors 
the consideration; as, for instance, a contract to seU aU the straw one 
has to spare, not exceeding three tons, is not void for uncertainty in not 
expressing the quantity of straw contracted to be sold ; the quantity 
agreed to be sold can be ascertained by extrinsic evidencew Parker t« 



lOe FORMATION OF CONTRACT. Firt IL 

feet that he had not enjoyed as many advantages as the 
other children. It was said by the Court that the pix>mise 
given by the son was no more than a promise " not to bore 
his father,'^ * and was too vague to support the father's prom- 
ise to discharge the son from liability on the note. ^^ A man 
might complain that another person used the highway more 
than he ought to do, and that other might say ^^do not 
complain and I will give yon £5." ^ It is ridiculous to sup- 
pose that such promises could be binding. 

{o) Promise to do what a man is bound to do.— Another 
form of unreality of consideration has arisen where the al- 
leged consideration is a promise to do, or actually doing 
what a man is already bound by law to do for the prom- 
isor.^ The promisor gets nothing more than he is already 
entitled to. Thus where in the course of a voyage from 
London to the Baltic and back two seamen deserted,' and 
the captain, being unable to supply their place, promised 
the rest of the crew that if they would work the vessel home 
the wages of the two deserters should be divided among 
them, this promise was held not to be binding. *'The 
agreement," said Lord EUenborough, " is void for want of 
consideration. There was no consideration for the ulterior 
pay promised to the mariners who remained with the ship. 
Before they sailed from London they had undertaken to do 
all they could under all the emergencies of the voyage. • • 
The desertion of a part of the crew is to be considered an 
emergency of the voyage as much as their death ; and those 
who remain are bound by the terms of their original con- 
tract to bring the ship in safety to her destined port." • 

Here then the sailors promised no more than their oon- 

«. Per Parke, B. 

6. For PoUock, C. & 

& Stuck ▼. Meyrick, i Ounp. 817. 

PetUt, 48 N. J. L. 513; MlUer y. Kendig, 65 la. 174; Thompson v. Ster- 
eos, 71 Pa. St. 161. 

1 Warren v. Hodge, 121 Mass. 126: Shiber y. Shack, SB HI 191 ; Ayen 
V. Ghioago, eta B'7 Co. 52 Iow% 47S; Hobnes y. Bujd, 90 Ind. 883; 



laup. n. § 4 UNREAL CX)NSIDERATION. 107 

tract already bound them to do. It would have been other- 
wise if risks had arisen which were not contemplated in the 
contract* For instance, such a contract as that which the 
seamen had entered into in the case just cited contains an 
implied condition that the ship shall be seaworthy. 
So where a seaman* had signed articles of agreement [*83] 
to help navigate a vessel home from the Falkland 
Isles, and the vessel proved to be nnseaworthy, a promise 
of extra reward to induce him to abide by his contract was 
held to be binding.^ 

Promise not to do what a man legally cannot do.— We 
have spoken hitherto of cases in which a man has promised 

«L Harttoj T. Fonmil^, 7 K. ft B. 879l 
k Tunur t. Owen, 8 F. ft F. 177. 

PhGBniz Ina. Oa T. Raick, 110 m. 538; Tacker t. Bartlett, 86 Ma 114; 
Jenneas y. Lane, 26 Me. 475; Watts y. French, 19 N. J. Eq. 407. A dis- 
charge of a statutorj obligation ia no consideration for a contract, New- 
ton Y. Chicago, eta B'y Go. 66 Iowa, 423 ; but the doing what one is only 
morally boond to do, as paying a debt barred by the statute of. llmita- 
tioDfl, is a good ocnudderation for a promiaa Schreiner y. Cummings, 
as Pa. St 874. 

Substltiited agreement— It often happens that a party to an agree- 
ment refuses to perform, on finding the contract more onerous than was 
expected, unless the other party will agree to make further compens* 
tion. The extra compensation is promised in order to secure perform- 
ance of the contract. An action on such promise is generally succees- 
folly defended on the ground that the only consideration for the prom- 
ise was the plaintiff's agreement to do what he was already under legal 
oUigation to do^ Yiz., perform his contract Ayers y. Chicago, eta R*y 
Ga 53 Iowa, 478; Reynolds y. Nugent, 25 Ind. 828; Owen y. BteYeos, 78 
Dl 478; McCarty y. Hampton Building Ass'n, 61 Iowa, 387. 

Tkere is another class of cases which at first sight seem to be in ood- 
flict with the aboYe; they are, howcYer decided upon another principla 
Where parties in the execution of a contract become iuYolYcd in diffi- 
culty thereunder, they may relinquish their rights under the old con- 
tract and make a new agreement They ha Ye simply exercised the well 
recognised right of discharging their contract by a substituted agree- 
ment (see p. 361) which is binding on the parties to it Munroe y. Per- 
toDB, 9 Pick. 805; Rollins y. Marsh, 138 Mass. 116; Moore y. Detroit Looo- 
motiYe Works, 14 Mich* 373; Qoebel y. Lynn, 47 Mich* 489; Lallimore t. 
Haneen, 14 Johns. 880 ; Coynes y. Lynde, 10 Ind. 388; Lawrauoe t. DaY«!y« 
)Syt864;CannellyY. DeYoe,87Ck»m. 570. 



1C6 FOBMATION OF OOMTRiLCT. Ftet U 

to do that which he is already, nnder oontraot or otherwise, 
legally bound to do; it must be borne in mind that a prom* 
ise not to do what a man legally cannot do is an eqnaUy 
bad consideration for a promise. The case of Wade «. 
Simeon^ cited in discussing forbearance as a consideration^ 
is a sufficient illustration of this point^ 

Doing that which a man Is bound to do. — The actual 
performance of that which a man is legally bound to do, 
stands on the same footing as his promise to do that which 
he is legally compellable to do. The rule seems an obvious 
result of the doctrine of consideration, but some applica- 
tions of it have met with severe criticism. 

That which Is done inust be different. — The paym&nt cf 
a smaller sum in aatiaf action of^ a. laargar^le^ not-^- ffood dis^ 
charge of a debfJ" It is in fact doing no more than a man 
is already bound to do, and it is no consideration for a 
promise, express or implied, to forego the residue of the 
debt There__must be^mething different to that which 
the recipient is entitled to demand, in the thing done or 
given, in order to support his promise. The difference 

•.iC.B.648L 

b. Ante, p. 7S. 

e. It is itraBcetiiAttfato role diooMftlU be spoken of Mtlie rale tn Comber t.Wa^ 
In that oMe It wm held that n promlMory note for £& wm no latisfactlon fore debt d 
£16, not becnoee there wm no ooneideratlon (for n negotiable instrument was gives 
for n debt) but because the satisfaction was inadequate. Such a decision would hardlj 
be supported now (see editor's note to the case at p. 800). 1 Sm. L. 0. 841. 

iGoodwin t. FoUett, 25 Vt. 886; Barron t. VandeTert, 18 Ala. 288; 
Bailey ▼. Day, 26 Me. 88; Harriaon y. Close, 2 Johns. 460; Harriman t. 
Harriman, 12 Gray, 841; Lening ▼. Gould, 18 Cal. 598; Singleton y. 
Thomas, 78 Ala. 205; 8t Louis, eta B*y Co. y. Davis, 85 Kans. 464; 
Lankton y. Stewart, 27 limn. 846; Gould y. Buller, 127 Mass. 886. Bui 
it is said that this rule is exceedingly technical, and to some extent 
against good faith, and one not to be extended beyond its precise im- 
port It does not apply when the payment of a less sum is made before 
the debt falls due, or at another place than that stipulated in the con- 
tract; and any collateral benefit reoeiYed by the creditor, which would 
raise a technical legal consideration, however small, is sufficient to sup- 
port the agreement. Harper y. Graham, 20 Ohio, 105; Vamey y. Con- 
roy, 77 Me. 627; KeUogg y. Richards, U Wend. 116; Brooka t. White, 
lllet28fi. 



Quip. n. § 4. UNREAL CONSIDEEATION. lOS 

must be real, but the fact that it is slight will not destroy 
its efficacy in making the consideration good, for if the 
CJonrts were to say that the thing done in return for a prom- 
ise was not sufficiently unlike that to which the promisor 
was already bound, they would in fact be determining the 
adequacy of the consideration. Thus, the giving a negoti 
able instrument for a money debt, or ^* the gift of a horsey 
a hawk or a robe, in satisfaction, is good. For it 
shall be intended that a horse, a hawk or a *robe [*84] 
might be more beneficial to the plaintiff than money,* 
in respect of some circumstance, or otherwise the plaint- 
iff would not have accepted it in satisfaction." 

Else where Is the consideration for the promise to 
forego! — It would seem plain that if a man wishes to 
make a binding promise, otherwise than under seal, to forego 
legal rights, such a promise must needs depend for its va- 
lidity upon the rules common to all promises. But it is well 
to look at a promise of this sort when it is made before, or 
again when it is made after, the contract is broken: for 
different rules are applicable to the two cases. 

Contract executory. — If a contract is wholly executory, 
if the liabilities of both parties are as yet unfulfilled, it can 
be discharged by mutual consent, the acquittance of each 
from the other's claims being the consideration for the 
promise of each to waive his own. 

Contract executed. — A contract in which J., one of the 
parties, has done his part, and X, the other, remains liable, 
cannot (except in the case of bills of exchange or promis- 
sory notes) be discharged by mere consent,^ but it may be 
discharged by the substitution of a new agreement. A has 
supplied X with goods according to a contract X owes A 
the price of the goods. If A waives his claim for the 
money, where is the consideration for his promise to waive 
it! II A and X substitute a new agreement, to the effect 
that Xon paying half the price shall be exonerated from 

& nnfll1iOM^fiOo.Bep. m. 



no FORMATION OF CONTRACT. FM D. 

paying the remainder, where is the consideration for A^s 
promise to forego the payment of half the sum due to him f 
The new agreement needs consideration: there must be 
some benefit to J. or detriment to X in return for A^s 
promise. Detriment to X there can be none in paying 
half of a sum the whole of which he may at any time be 
compelled to pay; and benefit to A there can be none in 
receiving a portion of a sum the payment of which he can 
at any time compel* Unless A receives something di£Fer^ 
ent in kind, a chattel, or a negotiable instrument, or a fixed 
for an uncertain sum, his promise is gratuitous and must be 

made under seal 
[*85] ^Contract broken. — We now come to cases where 
the contract is broken and a promise made to for^o 
the right arising from the breach. 

Bight in dispute. — Where the right itself is in dispute 
the suit may be compromised as described on p. 75. 

Bight admitted. — Where the right is undisputed, the 
amount due may be imcertain or certain. 

And damages uncertain. — If it is uncertain, the payment 
of a liquidated or certain sum would be consideration for 
foregoing a claim for a larger though uncertain * amount' 

Bight admitted and damages certain. — If it is certain, 
the promise to forego the claim or any portion can only be 
supported by the giving of something different in kind, or 
by a payment at an earlier date. 

And whether the sum due is of certain or uncertain 
amount the consideration for the promise to forego must be 
executed. It is not enough that the parties are agreed, their 
agreement must be carried out if it is to be an answer to the 
original cause of action. Where it has been carried out it is 

a. Qoddanl ▼. O'Brien, 9 Q. B. D. 87. 
h. WilkiiMon ▼. Byen, 1 A. A B. 100. 

iGo8S T. EUiasoQ* 186 Mass. 508; Henkle t. Minneapolis, etc Kj 06w 
81 Minn. 484; BedeU ▼. Bissell, 6 CoL 162; Osborn t. Hoffman, 68 Ind. 
489; MoOaU ▼. Nsts, 68 Miss. 494; Potter t. Douglass, 44 Oona. 641; 
BuUT.BuU.48 0onn.466. 



Chap. n. S ^ UimEAL CONSIDERATION. lU 

an accord and satUfactiany where it has not been carried oat 
it is an accord executory. As is said in an old case, ^^ accord 
executed is satisfaction : * accord executory is only substituting 
one cause of action for another which might go on to any 
extent" It is strange that while the somewhat arbitrary 
rule that an accord, to be a good defense, must be executed, 
has passed without criticism, judges and text-book writers 
have conmiented with marked severity on the rule that the 
payment of a smaller sum in satisfaction of a larger is not ^ a 
good discharge of a debt.^ 

a. IjniiT. Bmoe, S H. Bl. 819. 

6. WatldBWilUanH,J.,iii Bew ▼. FmOem, U Q. & D.Sn. rererwd on AppMl,*! 
piSM. 

^Aeeord and satisfaction.— The American authorities are with the 
text An accord must be executed and received in satisf action, or it iff 
no defense to an action on the original undertaking. BuaseU ▼. Lytle, 6 
Wend. 890; Daniels y. Hollenbeck, 19 Wend. 408; Frost t. Johnson, 8 
Ohio, 893; EUis ▼. Betzer, 2 Ohio, 89; Schitz t. Meyer, 61 Wis. 418; 
rroutmann t. Lucas, 68 Qa. 466; Pettis t. Raj, 12 R. L 844; Krumer t. 
Heines, 75 N. T. 574; Summers v. HamUton, 56 Cal. 598. But this ar^ 
bitraiy rule has not passed without criticism. In Whitsett t. Clayton, 
5 CoL 476, it was held that where an agreement is entered into between 
a creditor and his debtor, the terms of which are that the debtor is to 
execute a new promise with a surely, in a smaller sum, payable at a 
future day, the creditor agreeing to accept the new promise in satis- 
faction of the old one, the surety to be sufficient, and the new promise 
being executed and tendered and the tender kept good, such performance 
and tender constitute a bar to the action on the original demand* The 
accord was sustained as one of mutual promises, differing in terms from 
the original agreement, and as a substituted agreement operating as a 
■atisf action of original demand. The opinion reviews the American au- 
tboritiea at length and criticises the rule that an accord to be a defense 
most be accepted, and applies the maxim, Ceaaante ratione legis^ eessat 
^ lob Bee Babcock ▼. Hawkins, 28 Vt 561 ; Christie t. Craig, 20 Pa. 
6t 480; BradshawT. Davis, 12 Tex. 886 ; Heam v. Curran, 118. & M. 861; 
Jones T. Perkins, 29 Miss. 142. An executory accord consisting of mutual 
promises, varying in their legal effect from those contained in the origi- 
nal agreement, and thus having a new consideration, is binding on the 
parties, and an action will lie for a breach of it Billings v. Vanderbeck, 
88 Barb. 546; Schweider v. Lang, 29 liinn. 254. And if the rule of 
Whitsett V. Clayton (mpra) were adopted in such cases, it would pre- 
vent circuity of action, at the expense, however, of '^ overthrowing aU 
thebooka.'* See poti, 81ft. 



119 FORMATION 01* CONTRAOT. Part n. 

There seems no difference between a promise by J. to X 
to give him £45 on demand, and a promise b j J. to Xto 
excuse him £45 oat of £50 then due. If consideration is 
needed in the one case, it is needed in the other, and there 
can be no reason why the la.w should favour a man who is 
excused money which he ought to pay, more than a man 
who is promised money which he has not earned. 

Apparent exceptions. — There are some apparent 
[*86] exceptions to this rule which it *may be well to dis- 
cuss, if for no other reason, on the ground that they 
illustrate the rule itself. 

Composition with creditors. — A composition with cred- 
itors appears at first sight to be an infraction of the rule, 
inasmuch as each creditor undertakes to accept a less sum 
than is due to him in satisfaction of a greater. But the 
promise to pay, or the payment of a portion of a debt, is 
not the consideration upon which the creditor renounces the 
residue. That this is so is apparent from the case of liioA 
V. Sutton* There the defendant, a debtor, compounded 
with his creditors and paid them 7«. in the pound; he 
promised the plaintiff, who was one of the creditors, that 
he would pay him the residue when he could ; but the plaint- 
iff nevertheless gave him a receipt of all claims which he 
might have against him ^' from the beginning of the world 
to that day." The plaintiff subsequently brought an action 
for the residue of his claim; the defendant pleaded the ac- 
ceptance of 1$. in the pound in full of all demands: but this 
was held to be no answer to the plaintiff's claim. '* It is 
impossible," said Lord Ellenborougb, " to contend that ac- 
ceptance of £17 10s. is an extinguishment of a debt of £50. 
There must be some consideration for a relinquishment of 
the residue; something collateral, to show a possibility of 
benefit to the party relinquishing his further claim, otherwise 
the agreement is nvdum pactum.^^ 

Consideration for composition is an agreement betwees 
dilferent parties. — The consideration in a composition with 



n. § 4. UNREAL CONSIDEBATEON. 118 

ereditors most therefore be something other than the mere 
acceptance of a smaller stun in satisfaction of a larger: it is 
the sabstitution of a new agreement with new parties and a 
new consideration. 

The Common Law on this point (apart from the varions 
Bankruptcy Acts) was settled in the case of Oood v. Chsea- 
nuuK^ There the def endant, a debtor who had compounded 
with his creditors, set up as against an individual creditor 
suing for the whole of his debt, not a separate promise by 
that creditor to forego the residue, but a composition made 
with all the creditors. The composition was held to be a 
good defense to the action, and the consideration 
which 'supported each creditor's promise to accept a [*87] 
lesser sum in satisfaction of a greater was thus stated 
by Parke, J.: — "Here each creditor entered into a new 
agreement with the defendant (the debtor), the considera- 
tion of which, to the creditor, was a forbearance bj all 
the other creditors, who were parties, to insist upon their 
claims." * It is not the payment of a portion of the debt, 
which forms the consideration in the case of a composition 
with creditors, but the substitution of a new agreement with 
different parties for a previous debt.^ 

The composition with creditors is therefore no ezceptioo 
to the general rule, inasmuch as the debtor not only pays 
the creditor a portion of the sum due, but procures a prom- 
ise by each of his other creditors, or by a certain number 
of them, that each will be content with a similar propor- 
tionate payment if the others will forbear to ask for more. 
And creditor X not merely gets payment of 10s. in the 
pound from his debtor J., but gets a promise from creditors 
Tand Z that they too will be content with a payment of 
Iftt. in the pound. 

^ QoodT. Ctiafinaii. i & ft iu ttS; Boyd ▼. mnd*. 1 H. ft N. 088; SUtor t. Jobm, 

ua8Ex.i9a 

iPwkiDs T. Lookwood, 100 Man. 260; Eaton y. linooln, 11 HasB. 484; 
^barj Y, Snow, 87 la. 410; Bobert ▼. Bamum, 80 K7. Sa 

I 



114 FOBMATION OF OONTRAOT. Ftat a 

Promise to perform existing contract. — It is a farmort 
difficult task to reconcile with the general rule those cases 
in which it has been held that a contract is binding which 
is made in consideration of a performance or promise of 
performance by one of the parties, of a contract already 
subsisting between himself and a third party. The circum> 
stances under which such a case may arise may be stated 
thus: — '^ A man may be bound by his contract to do a par- 
ticular thing; but while it is doubtful whether or no h« 
will do it, if a third person steps in and says ' I will pay you 
if you will do it,' * the performance is a valid consideratioa 
for the payment.** * 

The matter is not very easy to understand upon principle; 
it has been said that the promise is based on the creation 
** of a new and distinct right " ^ for the promisor, in the per- 
formance of the contract between his promisee and the 
third party. But this is in fact to assume that a right ia 
created, which would not be the case if the consideration 

for the promise were bad. 
[♦88] *In Shadwell v. ShadweU • the question arose thus : — 

The plaintiff had been under promise of marriage to 
X: his uncle promised in writing that if he would perform 
his engagement he should receive during his (the uncle's) 
.life-time £150 a year. The plaintiff married X; the annuity 
fell into arrear; the uncle died, and the plaintiff sued his 
executors. The Court differed as to the existence of the 
consideration for the uncle's promise. Erie, 0. J., and Keat- 
ing, J., thought that the marriage would support the prom- 

«. Fer WQde, 6., In Sootno ▼. Pocf • • B. A N. S9& 
i. PviUoek, 178. 6dL 4 

c«aB.N.aiw. 

1 ShadweU ?• Shad well.— In the foUowing casee it is said that a 
promiae made under the cjrcnmwtancee stated in the text is not binding, 
there being no consideration for the promise: Johnson ▼. Sellers, 83 Ala. 
865; Peelman y. Peelman, 4 Ind. 012; Merritt t. Giddings, 1 Mackey (D- 
C), S94; Putnam y. Woodbury, 68 Me. 6S. In Johnson ▼. SeUers the 
facts were substantially the same as in ShadweU ▼. ShadweU, but the 
English cases were not caUed to the attention of the courts 



IL § 4 OONBIDEBATION EXBOUTBD. UH 

m^ which was in fact an offer capable of becoming a 
binding contract when the marriage took place. Byles, J., 
held that the plaintiff had onlj done what he was legally 
bound to do, in performing his promise to marry; that thif 
was no consideration for the uncle's promise; and he dis- 
sented from the majority of the Oourt. 

Whether the promise is conditional on the performance 
of the contract, or whether it is given in return for a prom- 
ise to perform, does not seem to make any difference in 
principle. If we say that the consideration for it is the 
detriment to the promisee in exposing himself to two suits 
instead of one for the breach of his contract, we beg the 
question, for we assume that an action would lie on such a 
promise. If we say that the consideration is the fulfillment 
of the promisor's desire to see the contract carried out, we 
run the risk of confounding motive and consideration. The 
judgment of WUde, B., in Scotson v. Pegg^ seems to leave 
no doubt that in the opinion of the learned Baron a promise 
18 binding which is made on such a consideration; the dif- 
ficulty is to reconcile these decisions with the general prin- 
ciple laid down above and constantly affirmed by the 
Courts. 

Possible explanation of Shadwell v. Shadwell.— The 
ease may however be put in this way: that an executory 
contract may always be discharged by agreement between 
the parties; that A and Jf, parties to such an agreement, 
may thus put an end to it at any time by mutual consent; 
that if Xsays to J., ^^ do noi exercise this power; insist on 
the performance by M of his agreement with you, 
♦and I will give you so and so," the carrying out by [♦89] 
^ of his agreement, or his promise to do so, would 
be a consideration for a promise by X. A in fact agrees 
to abandon a right which he might have exercised in con- 
currence with if, and this, as we have seen, has always 
been held to be consideration for a promise.^ 



118 FOBMAnOM OF OOMTRiLCT. PM XL 

It must, however, be borne in mind that where the peii> 
■on to whom such an offer is made has no opportunity of 
accepting or rejecting the things offered, an acceptanoe 
which he cannot help will not bind him.^ For instance. A, 
agreed with Xto command his ship during a voyage; in 
the course of the voyage he threw up his command but 
helped to work the vessel home. Afterwards he sued X'y 
among other things, for service thus rendered in bringing' 
back the ship. But the Oourt would not admit a claim 
[•91] for such services; evidence ♦of " a recognition or ac- 
ceptance of services may be sufficient to show an im- 
plied contract to pay for them if at the time the defendant had 
power to accept or refuse the services. But in this case it 
was not so. The defendant did not know of the services 
until the return of the vessel, and it was then something 
past which would not imply — perhaps would not sup- 
port — a promise to pay for it"* And the difficulty which 
would arise, should such an enforced acceptance create a 
promise, is forcibly stated by Pollock, 0. B.: — ^' Suppose I 
clean your property without your knowledge, have I then a 
olaim on you for payment? One cleans another's shoes; 
what can the other do but put them ont Is that evidence 
of a contract to pay for the cleaning? '' 

{f>) Offer of a promise for an act. — The '^consideration 
executed upon request," or the contract which arises on the 
acceptance by act of the offer of a promise, is best illus- 

«. Tiijlor ▼. I^drd, 96 L. J. Bzoh. p. aS9. 

m InKeiuT.Tupper, 63 N.T.(»0, it is said "The English rule thai 
a nooverj may be had for the portion delivered^ if retained until after 
the time for full performance (as held in 9 B. ft G. 887, and other casesX 
has never been adopted, but expressly repudiated by the courts of the 
state. See p.894 

1 In Thornton ▼. Bturgis, 88 Mich. 688, a Tillage newspaper had pub- 
lished the local ordinances without authority, and hi an action against 
the Tillage the publisher sought to reooTer, on the ground that legitimate 
serrice had been rendered, which had been accepted and appropriated 
by the Tillage. Held, that he could not recoTer; that contracts, ex- 
press or implied, are not to be made by action of one par^ alone^ when 
the ethsr party has no oontro!, and no authority to interf era 



Ghifw n. 1 4 OONSIDERATION SXECUTED. 1 II 

tifttad bj the case of an adTertisement of a reward for 
serrices which makes a binding promise to give the reward 
vrhea the seryioe is rendered. Under these circumstances 
it is not the offerer, but the acceptor, who has done his part 
as soon as he becomes a party to the contract. Thus if A 
makes a general offer of reward for information and X sup- 
plies the information, A*s offer is turned into a binding 
promise by the act of X, and X at once concludes the con- 
tract and does all that he is bound to do under it.* 

And this form of consideration will support an implied 
as well as an express promise where a man is asked to do 
some service which will entail certain liabilities and ex- 
penses. In such a case the request for such services implies 
a promise, which becomes binding when the liabilities or 
expenses are incurred, to make good his loss to the prom- 
isee. Thus where the defendant employed an auctioneer 
to sell her estate, and the auctioneer was compelled in the 
oourae of the proceedings to pay certain duties to the Crown, 
it was held that the fact of employment implied a promise 
by the defendant to repay the amount of the duties, and 
entitled the auctioneer to recover them/ ^^ Whether 
the request be direct, *as where the party is expressly [*92] 
desired by the defendant to pay; or indirect, as 
where he is placed by him under a liability to pay, and does 
pay, makes no difference." 

It is probably on this pnnciple, the implication of a prom- 
ise in a request, that the case of Lcmipl&igh v. Braithwaii* 
is capable of explanation. If so, we do not need the theory 
that a subsequent promise to make a return for things done 
on request relates back to the request and is embodied in it 
Bat of this we shall speak shortly. 

Present distinguished f^om past consideration.— Hav> 
ing explained the nature of an executed consideration, it re- 
mains to distinguish present from past consideration. 



i ▼. navldMB, 11 A. A B. ML 
b. BiltlafaiT.Llo7d,44]LAW.7ll. 
ei 1 8b. L. a 14L 



120 fobmahon of oontract. Ptet n 

A past consideration is, in effect, no consideration at all 
that is to say, it confers no benefit on the promisor, and in. 
volves no detriment to the promisee in respect of his prom- 
ise.^ A past consideration is some act or forbearance in 
time past by which a man has benefited without thereby 
incurring any legal liability.* If afterwards, whether from 
good feeling or interested motives it matter not, he makes 
a promise to the person by whose act or forbearance he has 
benefited, and that promise is made upon no other consid- 
eration than the past benefit, it is gratuitous and cannot 
be enforced; it is based upon motive and not upon consid- 
eration. 

Exceptions. — The rule that a past consideration will not 
support a subsequent promise is only another mode of say- 
ing that every promise, whether express or implied, most, 
in order to be binding, be made in contemplation of a 
present or future benefit to the promisor. 

A purchased a horse from X, who afterwards, in consid- 
eration of the previous sale, promised that the horse was 
sound and free from vice. It was in fact a vicious horse 
It was held that the sale created no implied warranty or 
promise that the horse was not vicious ; that the promis* 
must therefore be regarded as independent of the sale, and 
as an express promise based upon a previous transaction. 
It fell therefore " within the general rule that a consid- 

1 Bartholemew y. Jackson, 30 Johns. 28; Wilson y. Edmonds, S4 N. 
H. 617; Dearborn ▼. Bowman, 8 Met 165; Oreen y. First Parish in 
Maiden, 10 Pick. 600; Shepherd v. Toung, 8 Gray, 162; WiUiams ▼. 
Hathaway, 19 Pick. 887; Osier y. Hobbs, 83 Ark. 216. 

s As an iUustration of a past consideration as distinguished from » 
present or executed consideration, the case of Ludlow y. Hardy, 88 Mich 
680, might be cited. In 1874 L. sold H. a quantity of liquors in Yiola 
tion of the statute against the manufacture and sale of Uquors as a be \ 
•rage. After a repeal of the statute, H., m consideration of the sal» 
and of an extension of time of payment, made a new promise to pay foi 
cue liquors purchased, and in fact paid $22. Action was brought on thi^ 
promise. QraYes, J., said, in rendering the opinion of the court: " Tht: 
original transaction was within the operation of the statbte, and wat 
eondemned by it. As a sale it was forbidden and illegaL and il mm sIa: 



n. S 4 CONSIDERATION EXECUTED. m 

eration passed and executed *will sapport no other [*93] 
promise than snoh as would be implied by law.'' * 

To the general rule thus laid down certain exceptions are 
said to exist ; and it is proposed to endeavour to ascertain the 
nature and limits of these exceptions, which are perhaps 
fewer and less important than is sometimes supposed. 

(a) Consideration moved by previous request. — A past 
consideration will, it is said, support a subsequent promise, 
if the consideration was given at the request of the promisor.^ 

In ZampleigA v. Braithwait^^ which is regarded as the 
leading case upon this subject, the plaintiff sued the defend- 
ant for £120 which the defendant had promised to pay to 

m. BoaoorU t. Tlunnaa, t Q. B. SSI 
h, ISmJth'sL. C. a7; Hobart, lOB. 

forbidden and illegal as a gift : and although like transactions subs^ 
qnent to the repeal of the statute referred to would not stand forbidden 
and illegal, the act in question, which occurred during the existence of 
the statute, has never become lawful. It had no legal vitality origi- 
naUj, and nothing has occurred since to breathe life into it. It has never 
been transformed into a valid act. Hence it has never been sufficient to 
afford any consideration for a promise.*' 

1 Lampleigh t. Bralth wait— This rule is unquestioned law in this 
ooontry and the difficulty suggested by the author has not often troubled 
oar courts. Chaffee v. Thomas, 7 Cow. 858; Lonsdale v. Brown, 4 
Wash. 148; Goldsby v. Robertson, 1 Blackf. (Ind.) 247; Carson v. Qark, 
) m. 118; Comstock v. Smith, 7 Johns. S7; Dearborn v. Bowman, 8 Met. 
165; Allen v. Woodward, 22 N. H. 544; Pool v. Homer, 64 Md. 133. But 
in Merrick v. Oiddings, 1 Mackey (D. C), 894, it is said that when services 
are performed at request, a subsequent promise different from that which 
the law implies from the request is nudum pactum, A request, in order 
to sapport a promise, may be inferred from the beneficial nature of the 
«xni8i«leration and the circumstances of the transaction. Oatfield v. 
Waring, 14 Johns. 188; Hicks v. Burhans, 10 Johns. 248; Wilson v. Ed- 
munds, 24 N. H. 517; O'Connor v. Beck with, 41 Mich. 657. In Booth 
V. Fitzpatrick, 86 Verm. 681, it is held that ** if the consideration, even 
without request, move directly from the plaintiff to the defendant, and 
iaures directly to defendant's benefit, the promise is binding though 
Dttde upon a past consideration.** See, also, Seymour v. Marlboro, 40 Vt, 
171; Doty v. Wilson, 14 Johns. 878. These cases, although the state- 
ments therein seem at variance with authority, may be sustained on 
the principle that a voluntary retention of the beneht received or ibm 
•doution of an unauthoriaed act may be eQUj*%lent to a request 



122 FORMATION OF CONTRACr. Fut II. 

him in eonsideration of serrices rendered at his request. 
The Court here agreed "that a mere voluntary courtesy will 
not have consideration to uphold an assumpsit. But if that 
courtesy were moved by a suit or request of the party that 
gives the assumpsit it will bind; for the promise, though it 
follows, yet it is not naked, but couples itself with the suit 
before, and the merits of the party procured by that suit." 

The case of Lampleigh v. Braithwait was decided in the 
year 1615, and for some time before and after that decision, 
cases are to be found which go to show, more or less def- 
initely, that a past consideration if moved by a previous re- 
quest will support a promise.^ But from the middle of the 
seventeenth century until the present time no direct author- 
ity for the rule can be discovered, with the exception of the 
case of Bradford v. Rovlston^ decided in the Irish Court of 
Exchequer in 1858. The rule is frequently mentioned as 
existing, but in the few modem cases which have incident- 
ally dealt with it, it appears to be regarded as open to ques- 
tion, or to be susceptible of a different interpretation to that 
which is placed upon it in text-books. 

Thus in Kaye v, Duitan,^ Tindal, C. J., first lays down the 
rule that where a consideration executed implies a promise 
of a particular sort, a subsequent promise based on the same 
consideration is not binding. By this he means that 
[*94] *when from the acceptance of consideration exe- 
cuted, the law implies a promise by the acceptor to 
make a return, the consideration is exhausted upon that 
promise. There is nothing further to support a subsequent 
and independent promise. 

Modem interpretations of the rule.— He then goes on to 
say, "The case may perhaps be different where there is a 
consideration from which no promise would be implied by 
law: that is, where the party suing has sustained a detri- 
ment to himself or conferred a benefit on the defendant at 

A See ooen collected in the note to Hunt ▼. Bate, Dyer, 87S «. 
b 8Ir. C. L. 468; Lani;deU, 45a 
• 7 M. A 0. 807. 



Chap. II i i. CONSIDERATION BXOCUTBD. 123 

his request under circumstances which would not ^aise any 
implied promise. In such cases it appears to have been held 
m some instances that the act done at the request of the 
party charged is a sufficient consideration to render binding 
a promise afterwards made by him in respect .of the act so 
done. • • . But it is not necessary to pronounce any 
opinion on that point."** 

The interpretation of the role which Tindal, C. J., re- 
garded as open to question is further narrowed by Maule, 
J., in Elderton v. Emmensfi "An executed consideration 
will sustain only such a promise as the law will imply." 
And again in Kennedy v. Broun,^ Erie, C. J., puts the case 
of Lampleigh v. Braithwait from a modem point of view. 
"It was assumed," he says, "that the journeys which the 
plaintiff performed at the request of the defendant and the 
other services he rendered would have been sufficient to 
make any promise binding if it had been connected there- 
with in one contract : the peculiarity of the decision lies in 
connecting a subsequent promise with a prior consideration 
after it had been executed. Probably at the present day, 
such service on such a request would have raised a promise 
by implication to pay what it was worth ; and the subsequent 
promise of a sum certain would have teen evidence for the 
jury to fix the amount.'* 

This would seem to be the ratio decidendi in WSkin^son v. 
Oliveira,^ where the plaintiff at the defendants 's request gave 
him a letter for the purposes of a lawsuit. The letter proved 
the defendant's case, by which mea^s he obtained a large 
sum of money, and he subsequently promised the 
plaintiff £1,000. •Here the plaintiff evidently ex- [•SS] 
pected something in return for giving up the letter, 
and the defendant's request for it amounted in effect to an 
offer that if the plaintiff would give him the letter he would 
pay a sum to be hereafter fixed. 

a Kaye ▼. Dutton, 7 M. A 0. SOL 

b 4 C B. 40S. 

• ISaaN.S 677. 

d 1 Blng. N. a 49a 



1S4 FORMATION OF CONTRACT. Flut It. 

Begarded from this point of view the rale which we are 
discussing amounts to this: where a request is made which 
is in substance an offer of a promise upon terms to be after- 
wards ascertained, and services are rendered in pursuance 
of that request, a subsequent promise to pay a fixed sum is 
either to be regarded as a part of the same transaction, or 
as evidence to assist the jury in determining what would be 
a reasonable sum. 

In opposition to this view stands the case of Bradford v. 
Jiatdston* the only case in modern times in which the rale 
in Lampleigh v. BraithwaU has come before the Courts for 
express decision. In that case Bradford, who had a ship to 
seUy was introduced by Roulston to two persons who were 
willing to purchase it. At the time of executing the bill of 
sale of the ship the purchasers were £55 short of the money 
agreed to be paid. Bradford nevertheless executed the bill 
of sale at the request of Roulston, and in consideration of 
this, Roulston upon a subsequent day guaranteed the pay- 
ment of the baUnce of £55 still due. There seems to have 
been some evidence that the guarantee was given at the 
time of the sale and was subsequently put into writing, but 
the Court felt it necessary to give an express decision, on 
the supposition that the consideration was wholly past, to 
the effect that the execution of the bill of sale to third 
parties upon the request of the defendant was consideration 
for a subsequent promise by him to answer for their de- 
fault. The authorities were elaborately reviewed and the 
rule in Lampleigh v. BraUhwait was adhered to in its literal 
BeuBe. 

It is submitted, however, that this decision must be re- 
oeived with some hesitation. The dictum of Erie, C. J., in 
Kennedy v. Broun was not adverted to; the case of Wilkin 

eon V. Oliveira was regarded as a direct authority for 
[•96] the rule in *its most extended sense, a view which, upon 

the facts of that case, is certainly open to question; 

fl. • fr. a U Ml ; LMBgdan. Ooatr. ML 



Gha^ n. § i. CX>NSIDERATION EXECUTED. ISft 

and the great gap in the chain of express deoisions on the 
point does not appear to have impressed the Court. 

Praetieal diflBenlties presented by the rule.— The prac- 
tical difficulties to which such an interpretation of the rule 
would give rise are obvious. Is any limit to be assigned to 
the time which may elapse between the act done upon re- 
quest and the promise made in consideration of itt This 
difficulty pressed upon the Court in one of the oldest cases 
upiin this subject, Halifax v. Barker^ where a promise was 
held not to be binding which was given upon consideration 
of a payment made upon request a year before. This sug- 
gests that the true solution is to be found in the supposition 
that the subsequent promise is only binding when the re> 
quests the consideration, and the promise form substantially 
one transaction. 

Another difficulty would arise as to the definition of ^^a 
request." Let us suppose that a man dangerously ill is in- 
formed by his physician that his state is so critical iEiS to 
justify desperate remedies; the physician advises him to try 
a remedy which he believes may possibly restore him to 
health, bat, if it does not do so, will probably kill him in a 
few hours; the remedy is of the physician's own invention, 
and he asks the patient in view of his desperate condition 
to allow him to make the experiment. The patient takes it 
and is cared; the fame of the cure makes the fortune of 
the physician, and a few years afterwards, finding himself 
in good circumstances, he promises to his former patient a 
sum of money in consideration of the acceptance of his 
remedy at his request. It is hardly possible to suppose that 
an action would lie upon such a promise. Yet it is a log- 
ical deduction from the decision of the Court in Bradford v. 
Raulstanj and from that statement therein contained '^ that 
where there is a past consideration^ consisting of a previous 
act done at the request of the defendant, it will support a 
subsequent promise." 

*And so we are driven to the conclusion that, on- [^97] 

A. I Dyw.p. SI a, B0«»: Vol IM Gfe«. Slis. 74L 



12« FX)RMATION OF CONTRACT, Part 11 

less the request is virtually an offer of a promise the precise 
extent of which is hereafter to be ascertained, or is so clearly 
made in contemplation of a promise to be given by the 
maker of the request that a subsequent promise may be re- 
garded as a part of the same transaction, the rule in Lamp- 
leigh V. Braithwait has no application.^ And it may not 
be presumptuous to say that in spite of the case decided 
between 1568 and 1635, of the continuous stream of dicta in 
text-books, and of the decision in Bradford v. Boulstanj the 
rule cannot be received in such a sense as to form a real ex- 
ception tathe principle that a promise, to be binding, must 
be made in contemplation of a present or futute benefit to 
the promisor. 

(li) Yolnntarlly doing what another was legally boand 

to do. — There is equal doubt as to the reality of another 
so-called exception. We find it laid down that '* where the 
plaintiff V(duntarily does that whoreunto the defendant waa 
legally compellable, and the defendant afterwards, in con- 
sideration thereof, expressly promises," he will be bound by 
such a promise.* 

It is submitted that the authority for this rule fails alto- 
gether so far as it rests on the cases which are are habitu- 
ally cited in support of it. Curiously enough, all turn upon 
the liability of parish authorities for medical attendance 
upon paupers who are settled in one parish, but resident in 
another. 

Watson V. Turner * (1767) was decided on the ground that 
the moral obligation resting upon overseers. of a parish to 
provide for the poor would support a promise made by them 
to pay for services previously rendered to a pauper by a 
medical man. 

In Atkhis V. Banw^n* (1802) it was held that the moral 
obligation resting u(>on tlie parish in which a pauper is aet- 

a. Sm Holmea' Common Law. pp «I5, 6 

b. Smith. L C 1. 148 

c Buller, Nisi Priua, 147; bal Me Seiwys'i Nki Priu*. p. 51, ■. U. 



Chap, a § 4 CONSIDERATION EXECUTED. 127 

ded, to reimburse another parish, in which the pauper hap- 
pened to be taken ill, for expenses incurred in medical 
attendance, is not sufficient to create a legal liability with- 
out an express promise. 

*In Wing v. ifiK* (1817), the pauper was also resid- [*98] 
ing out of his parish of settlement; but that parish 
acknowledged its liability for his maintenance by making 
him a weekly allowance. The pauper fell ill and died: 
during his illness he was attended by the plaintiff, an apothe- 
cary, who, after the pauper's death, was promised payment 
oi his bill by the defendant, overseer of the parish of settle- 
aent. The Court held the defendant liable. 

It is not easy to collect from the judgments of Lord 
Ellenborough, C. J., and Bayley, J., what were the grounds 
of their decision. Some sentences suggest that they held, 
on the authority of Watson v. Turner^ that a moral obliga- 
tion will support a promise ; others suggest that they held 
that there was a legal obligation cast on the parish of resi- 
dence to do that which the parish of settlement might 
legally have been compelled to do, and that a quasi-con- 
tractual relation thus arose between the parties; others 
again suggest that the allowance made to the pauper by the 
parish of settlement showed a knowledge that the pauper 
was being maintained at their risk, and amounted to an im- 
plied authority for bestowing the necessary medical attend- 
ance. This last is the view entertained as to the ratio deoi- 
dendi in Wing v. Mill by the Court of Exchequer in the only 
case remaining for examination. 

In Paynter v, WtUiams^ (1833) the facts were similar to 
those in Wing v. Milly with this very important exception, 
that there was no subsequent promise to pay the apothe- 
cary's bilL The defendant parish, the parish of settlement, 
w^as nevertheless held liable to pay for medical attendance 
supplied by the parish of residence. The payment of an 

Cl B. A ▲. lOB. 



m FOBICJlTION of OONTR^CT. Ptot n. 

allowanoe by the parish of setUement was held by Lord 
Lyndharst, 0. B., to amoont ^to a reqaest on the part of 
the ofScers that the pauper shall not be removed, and to a 
promise that they will allow what was requisite." 

It would seem, then, that in the cases which are said to 
furnish this supposed rule the promise was either 
[*99] based upon *a moral obligation, which, since the de- 
cision in Ecuttooodv. Kenyon^ would no longer be suf- 
ficient to support it, or was merely an acknowledgment of 
an existing liability arising from a contract which might be 
implied by the acts of the parties, — a liability which, on the 
authority of Paynter v. Williams^ existed apart from the 
fact of a subsequent promise. 

And this is stated to be the true ground upon which the 
decision in Watson v. Turner may be supported, in the note 
to Sdwyn^s Nisi Prvus* above referred to. " The defend- 
ants, being bound by law to provide for the poor of the 
parish, derived a benefit from the act of t)ie plaintiff, who 
afforded that assistance to the pauper which it was the duty 
of the defendants to have provided: this was the consider- 
ation, and the subsequent promise by the defendants to pay 
for such assistance w<u evidence from which it might he in- 
ferred that the consideration was performed by the plavntiff 
ioith the consent of the defevidants^ and consequently suffi- 
cient to support a general indebitatus assumpsit for work 
and labour performed by the plaintiff for the defendants, 
at their request.^^ 

It may not be safe to say that the rule as habitually laid 

down is non-existent, but the cases cited in support of it 

seem to fail, on examination, to bear it out It seems 

strange that it should have been so often reiterated npon 

uch scanty and unsatisfactory authority.^ 

fl. 11 A. A K. 44A. 
i.See|^Sl,B.U. 

iln Gleason t. Pjka, 88 Pick. 898, the plaintiff had TohmtarOj paid 
monej which the defendant was legally bound to paj, and aa action 
was brought on defendantfi subsequent promise to rsimbvne the plaint- 



n. g 4 CX)NSIDERATION EXECUTED. 189 

It hafl however been adopted in the Indian Contract Act,* 
which also, in its definition of consideration, includes the 
''consideration executed upon request" of Lampleigh i^. 
jBraithwaii. It is perhaps unfortunate that the framers of 
that Act should have so readily abandoned so satisfactory 
a test of the validity of simple contracts as the English 
doctrine of Consideration has proved itself to be. 

(c) Beal exception to general rule. — A more substantial 
exception to the general rule is to be foimd in the cases in 
which a person has been held capable of reviving an agree- 
ment by which he has benefited, but which by rules 
of law since repealed, incapacity to contract *no [*100] 
longer existing, or mere lapse of time, is not en- 
forceable against him. The principle upon which these 
cases rest is, '^ that where the consideration was originally 
beneficial to the party promising, yet if he be protected 
from liability by some provision of the statute or common 
law, meant for his advantage, he may renounce the benefit 
of that law; and if he promises to pay the debt, which is 
only what an honest man ought to do, he is then bound by 
the law to perform it." • 

The following illustrations of the principle are to be 
found in the Beports. 

Illnstratiye cases. — A promise by a person of full age 
to satisfy debts contracted during infancy was binding upon 
him before 87 and 38 Vict. c. 62.^ 

A promise made by a bankrupt,' discharged from debts 
by a certificate of bankruptcy, to satisfy the whole or part 

a. I as, sulM. t; I S, lalM. (dX 

k Fiarka, B., In Earle ▼. OllTer, 9 Bzch. 71, 

<L WUUamsT. Moor, 11 M. A W. 968. 

d. Tmeman ▼. Fenton, Cowp. ML 

iff. The court held : " This promise, we think, is equivnlent to a preTioos 
request. It comes witiun the weU established principle that the 8ob> 
isqoent ratification of an act done by a YoluntarT- agent of another, 
without authority from him, is equTalent to a prorious aotborilgr." 
I>ol7T. Wilson, U Johns. 882. 
S 



180 FORMATION OF OONTRACT. PartIL 

of debts dae to a creditor waB binding before 12 and 13 
Vict c. 102, § 204« 

A debt barred by the Statute of Limitations is conside^ 
ation for a subsequent promise to pay it 

In Lee v. Iluggeridge^ a married woman gave a bond for 
money advanced at her request to her son by a former hus- 
band. Afterwards, when a widow, she promised that her 
executors should pay the principal and interest secured by 
the bond, and it was held that this promise was binding.^ 

In Flight v. Reed^ bills of exchange were given by the 
defendant to the plaintiff to secure the repayment of money 
lent at usurious interest while the usury laws were in force. 
The bills were therefore void as between the plaintiff and 
defendant. After the repeal of the usury laws by 17 and 
18 Yict c. 90, the defendant renewed the bills, the consid- 
eration for renewal being the past loan, and it was held 

that be was liable upon them. 
[*101] Common elements in all the cases. — *There are 
certain features common to all these cases. Each 
in its origin presents the essential elements of agreement, 
and in each of them one of the parties has got all that he 
bargained for. The other party cannot obtain what he 
was promised, either because he made an agreement with 
one who was incapable of contracting, or because a tech- 
nical rule of law forbids the agreement to be enforced. If 
the party who has received the benefit which he expected 
from the agreement afterwards acquires capacity to con- 
tract, or if the rule of law is repealed, as in the case of the 
Usury Acts, or, as in the case of the Statute of Limitations, 
admits of a waiver by the person whom it protects, then a 

a. By 6 Ctoo. rv. e. 16, 1 181, this promise h*d lo be In wHting. At the praeent day 
■uch a promise Is only binding If there be new conaideradoa. For tlie history and 
present state of law on this point see Jakeman ▼. Cook, 6 Ex. D. 9k 

b. 5 Taunt 86. 
e. 1 H. A 0. 706. 

1 Brown t. Bennett, 76 Pa. St 422. CcftUra, Waten t. Bean, 15 Q«. 
868, expreasly disapproying of Lee t. MuggeridgOi 



Qmp. IL § 4 OONSIDEBATION EXECUTEa 181 

new promise based upon the consideration already received 
is binding.^ 

They do not rest upon moral obligation. — The rule thus 
regarded seems a plain and reasonable exception to the gen- 
eral doctrine that a past consideration will not support a 
promise. Unfortunately, while the rule was in the course 
of establishment it rested for a time upon the support of the 
moral dbUgcution which was supposed to bind the person 
benefited and to give efficacy to his promise. 

It would have seemed enough to have said that when two 
persons havj made an agreement, and one has got all the 
benefit which he expected from it, and is protected by tech- 
nical rules of law from doing what he had promised to do 
in return, he will be bound if, when those rules have ceased 
to operate, he renews his original promise. But when once 
the law of contract was brought into the cloudland of moral 
obligation, it became extremely hard to say what promises 
might or might not be enforced. The phrase was far larger 
than the circumstances needed, and the language used in 
some of the cases cited above was calculated to make the va- 
lidity of contracts turn upon a series of ethical problems. In 
Lee V. Muggeridge^ Mansfield, C. J., says, ^^ It has long been 
established, that where a person is morally and conscien- 
tiously bound to pay a debt, though not legally bound, a sub- 

•.ITMmt.aOL 

1 Where the debtor is released from his debt by proyisions of poeitive 
law, his sabsequent express promise to pay the debt will be enforced ; but 
where the debt has been discharged by the free and voluntary act of the 
creditor, a sabsequent promise to pay will not be enforced* Montgom- 
ery y. Lanpton, 8 Met (Ky.) 619; Shepard ▼. Rhoades, 7 R. I. 470; Hale 
T. Rice, 124 Mass. 292; Mason y. Campbell, 27 Minn. 64; Crans v. 
Honter, 28 N. Y, 894; Edwards y. Nelson, 61 Mich. 121. See note, p. 80. 

There axe authorities to the e£fect that a promise to pay the balance, 
after part of a debt has been paid and the creditor has executed a 
release, wiU be sustained by the moral obligation to pay in fuU, Willing 
T. Peters, 12 Serg. ^ Rawle, 177; Stafford y. Baoon, 26 Wend. 884; but 
these cases are no longer authority, since the doctrine of moral oblige 
tioQ has been abandoned. Bishop on Contracts, § 100 



133 FORMATION OF CX^NTRACT. Ftt« H. 

■eqaent promise to pay will give a right of action. 
[*10S] The only question ^therefore is whether upon thia 
declaration there appears a good moral obligation." 
This case affords perhaps the strongest example of the 
mode in which the phrase was employed.* Its effect, after 
it had undergone some criticism from Lord Tenterden, was 
Anally limited by the decision in Eashooad v. Kenyan} The 
doctrine of the sufSciency of moral obligation to support a 
promise was there definitely called in question. The plaint- 
iffi as guardian and agent of the defendant's wife, had, while 
she was a minor, laid out money upon the improvement of 
her property; he did this voluntarily, and in order to do so 
was compelled to borrow money, for which he gave a prom- 
issory note. When the minor came of age she assented to 
the transaction, and after her marriage her husband prom- 
ised to pay the note. Upon this promise she was sued. 
The moral duty to fulfill such a promise was insisted on by 
the plaintiff's counsel, but was held by the Court to be in- 
sufficient where the consideration was wholly past. ^' In- 
deed," said Lord Denman in delivering judgment, ^Hhe 
doctrine would annihilate the necessity for any considera- 
tion at all, inasmuch as the mere fact of giving a promise 
creates a moral obligation to perform it" 

«. littMWd T. SkM^ S BL A Id. ui. 



CHAPTER m. 

Capacity of Partiea 

Wx liave hitherto dealt with the Contract itself and thosB 
elements in its structure which are essential to give it even 
a prima facte validity. Communication by offer and Ao- 
ceptance, and Form, or Consideration are necessary to an 
agreement the effect of which is to be entertained by courts 
of law ; but when we have constructed an apparently bindr 
ing contract, it is necessary, before we can pronounce finally 
npon its validity, that we should look to the parties to it^ 
and ask who made it, under what circumstances, and with 
what object In other words, we have to inquire whether 
the parties were capable of contracting, whether their ap- 
parent consent was genuine, and whether the objects were 
such as the law will admit 

And, first, as to the capacity of parties. 

How it may be affected. — There are certain persons 
whom the law regards as incapable, wholly or in part, of 
binding themselves by a promise, or of enforcing a promise 
made to them. And this incapacity may arise from the 
following causes: — 

(1) Political or professional status. 

(2) Youth which, until the age of 21 years, is supposed to 
imply an immaturity of judgment which the law will pro- 
tect 

(3) Artificiality of construction, such as that of corpora- 
tions, which being given a personality by law, take it npon 
such terms as. the law imposes. 

*(4) The permanent or temporary mental aberra- [*104] 
tion of lunacy or drunkenness. 
(5) Until the 1st of January, 1883, marriage effected a 



It4 FORMATION OF CONTRACT. Part 13, 

merger of the oontractoal capacity of the wife in that of 
her husband, subject to certain exceptions. The Married 
Woman's Property Act of 1882 is still so recent that it may 
be well to state briefly the old law and to note the extent 
to which it is changed. 

§ 1. PoUticdl or Professional Status} 

An alien has all power of contracting which a natnral- 
bom British subject has, except that he cannot acquire prop- 
erty in a British ship.' 

1 Power to eontraet ineident to soTerelgnty.— The power of the 
United States gOT^mment and the gOTomment of the several states to 
eontraet is recognized as " an incident to the general right of sover- 
eignty, *" subject, however, to constitutional limitations, and exerdaable 
only in furtherance of the object for which goyemment was established. 
United States ▼. Tingey, 6 Pet 114; United States y. Lane, 8 McLean, 
S60 ; Danolds y. State, 89 N. T. 86; The Floyd Acceptances, 7 Wall 666. 

Bemedy. — The English rule that a soyereign power cannot be sued 
without its consent is common law in this country. No action can be 
maintained against one of our states except by yirtue of some constitu- 
tional or statutory proyiaion granting permission. A remedy against the 
United States has been giyen by the establishment of the court of daims. 
United States y. Clark, 8 Pet. 486; Michigan State Bank y. Hammond, 
1 Doug. (Mich.) 637; Troy, etc. R. R. Ca y. (Donmionwealth, 127 Mass. 
48; People y. Talmage, 6 CaL 266; Pattisony. Shaw, 6 Ind. 877. And 
in most states proyision is made whereby the state is amenable to some 
judicial tribunal at the instance of its citizens. 

s While the term " alien " quite uniformly applies to one bom beyond 
the jurisdiction of the United States, still the term is sometimes applied, 
in statutes imposing personal disabilities, to one who is not a citizen of 
the state. One may be a citizen of the state and yet not a citizen of the 
United States. McDonel y. SUte, 90 Ind. 832; Ferguson y. Neyille, 61 
CaL 856. The rights of aliens in real property are generally regulated by 
the states. In respect to personalty and the obligations arising out of 
contracts and the remedies for breach of them, they haye, during the 
existence of peace, substantially the priyileges of natural-bom subjects. 

Many interesting questions grew out of contracts entered into between 
the citizens of the contending powers in the late war, but their consid- 
eration here would be inappropriata The principles stated in the text 
were recognized. The inhabitants of the federal states and the United 
States occupied the respectiye positions of enemies, and as a conse- 
quence thereof all intercourse between them was interdicted, and oon- 



^*«l^ m. S 1. INFANTS. 185 

-*■■ &1f en enemy, or British subject adhering to the king's 
eneinios,* cannot, without license from the Crown, make any 
n^sti c^ontract • ^ or enforce any existing contract during 
the eon t inuance of hostilities ; ' but his rights as to outstand- 
ing ^cui^racts made before the commencement of war are 
susperxd^d, not annulled, and can be enforced upon the con- 
^^^ion of peace. 
I? o^e^gn sovereigns and their representatives. — Foreign 
^^s and sovereigns and their representatives, and the 
^^a.1^ and household of their representatives, are not sub- 

16CY ♦■ 

* ^-o ^he jurisdiction of the Courts of this country unless 

3^ svi.l)mit themselves to it.* A contract entered into with 

. ^ I^^rsons cannot therefore be enforced against them un- 

^*^^j so choose, although they are capable of enforcing it. 

* It «« 

floiin^^ ^* ^^^B» not teem to be clearly settled that anything short of residence In a hostOe 
4loAf^^^ ^^>r trading purposes constitutes adherence to the king's enemies. The case of 
*/<kjU^ '^ '^'. Hardy, 8 ai. & S. 538. exhibits the reluctance of the Courts to draw oon- 
^>^TH.i^^ ^rom the mere fact that a man was re8ideui in a hostile couuLry when it was 
6. ^Zv^^^^**" '''™ *® hare removed, 
ft. .^ ^^^aUy ▼. Wilson, 1 Camp. 488. 
..^^ior ▼. Best, 14 C. B. p. 487. 

•^^-cs^r^r^ : 

||^^ ~^ t:^tween them made during the existence of hostilities were yoid. 

yL^^^^'^^'^^n T. Howard, 18 Wall. 99; De Jarnett ▼. De Qiverville, M 

^^^J^^^^ ; Habrecht ▼. Alexander, 1 Wood, 413 : Mutual Ins. Co. v. HO- 

Y>^^ » ^7 N. J. L. 444. The disposition was to preserve contracts existing 

1^ -^^J**"^ *^® '^^t o»ly suspending the remedy : but if the contract was of 

.^^ ^^inuing nature, as in the case of a partnership, and its performance 

» ^^fi ylolate the laws governing a state of war, the parties were relieyed 

^^'^ further obligations thereunder. Mutual Ins, Co. y. Hilyard, 37 

^* ^* L. 444; University v. Finch, 18 Wall. 106: Bank of New Orleans 

^- Mathews, 49 N. Y. 13; Cohen y. N. Y. Mutual Life, 50 N. Y. 610. 

^Phillips y. Hatch, 1 Dili 571; Hill y. Baker, 82 la. 803; Wright ?. 

Graham, 4 W. Va. 430. 

'Brook T. Filer, 85 Ind. 403; Simms t. City Ins. etc 86 Conn. 548; 
Blackwell y. Willard, 65 N. C. 655. An alien enemy may be sued, and 
when sued is permitted to make full defense. McVeigh y. United 
States, 11 WalL 256; M'Nair v. Tollar, 21 Minn. 176; Dorsey v. Thomp. 
0OII, 87 Md. 25; Mixer v. Sibley, 63 Ul. 61. And it is said that a resi^ 
dent alton may sue though hostilities be pending between his country 
and (he United States. License to remain and protection will be im- 
plied from his being suffered to remain, without being ordered out of the 
ootintry by the executive. Clark v. Horey, 10 Johiia. 68. See Zacharie 
y. Qodfr^, 60 111. 108. 



IM FORMATION OF CONTRACT. ¥tet n 

Felon undergoing sentence. — A person convicted ot 
treason or felony cannot, during the continuance of his con- 
viction, make a valid contract; nor can he enforce 
[*105] contracts made previous to conviction: but *these 
may be enforced by an administrator appointed for 
the purpose by the Crown.* 

A barrister cannot sue for fees due to him for services 
rendered in the ordinary course of his professional duties, 
whether the action be framed as arising upon an implied 
contract to pay for services rendered on request, or upon 
an express contract to pay a certain sum for the conduct of 
a particular business.^ 

A physician, until the year 1858, was so far in the posi- 
tion of a barrister that the rendering of services on request 
raised no implied promise to pay for them, though the par 
tient might bind himself by express contract: but now, by 
21 & 22 Yict. 0. 90, every physician may sue on such an 
implied contract, subject to the right of the College of Phy- 
sicians to regulate this privilege by by-law.' 

g 2. In/ants} 

The rules of law relating to the rights and liabilities of 
mfants upon contracts entered into by them during infancy 
have been considerably modified by recent legislation. It 
will therefore be well to state the rules of Common Law 

a. 18 A 84 Vict o. 88,118.9.10. 

8i KMUMdj ▼. Broim, 18 a B. N. & 877. 

1 The diaabilitieB arising from professional Hatus are not known to our 
law. Barristers and physicians, with regard to oontracts, have the same 
privileges that non-professional men have, and conTiction of treason and 
ezoonmianication produce no legal disability in this country, Wilson t. 
Burr, 25 W^end. 886; Vilas ▼. Downer, 21 Vt. 419. The common law 
role prevailed in New Jersey. Vanatta y. McEinley, 1 Harr. I* 28SL 

8 When the statutes are silent, a person, male or female, k of age on 
the beginning of the day before his or her twenty-first birthday;' bat by 
the statutes of many states a woman is of age at eighteen, a man at 
twenty -oneb 



Chap.m.S2. INFANTa 187 

upon the subject, and then to consider the modifications in 
historical order. 

Infant's contract Toldahle. — The general rale of Ck)ni- 
mon Law is, that an infantas contract is voidable at his op- 
tion,^ either before or after he has attained his majority. 
Bat the rale is thas limited : — • 

(1) The contract ceases to be voidable if it be ratified npon 
the attainment of 21 years of age. 

(2) The contract cannot be avoided if it be for necessaries. 
TVe will deal with these two exceptions in order. 

(1) Ratification. 

Mr. Pollock,* in an ezhaastive and convincing argament^ 
shows clearly that the better opinion has always been that 
the contract of an infant is not void bat voidable at his op- 
tion. Being so voidable, the infant may (apart from 
♦statatory restrictions) ratify his contract when he [*106] 
attains his majority, and assame the rights and lia- 
bilities arising from it. '^ The general doctrine is," said the 

a. PoUoek on Oontr. pp: 4^-80, 4th ad. 

1 Under the early English and American decisions contracts of infants 
were divided into three dasses: First. Binding, if for necessaries at 
fair and jnst rates. Second. Void, if manifestly prejudicial to the In- 
fant. Third. Voidable at the election of the minor, if the contracts be 
to his benefit or to his disadyantage according to circumstances, Vent 
▼. Osgood, 19 Pick. 673; Tucker v. Moreland, 10 Pet 68; and this rule is 
BtiU adhered to in many recent decisions. Robertson t. Weeks, 66 Me. 
102; Green t. WUding, 60 Iowa, 679; Ruchizky ▼. De Hayen, 97 Pa. 
St. 803; Dunton y. Brown, 81 Mich. 183. But by the weight of author- 
ity the classification is unsatisfactory, and all contracts of infants, ex* 
isept for necessaries, are treated as yoidable only ; at least none of his 
contracts are so far yoid as to be incapable of ratification on his reach- 
ing majority. Hamee y. Dipple, 81 Ohio St. 73 ; Holmes y. Bice, 46 
Mich. 143 ; Scranton y. Stewart, 63 Ind. 68 ; Boseman y. Browning, 81 Ark. 
864; Illinois, etc. y. Bunner, 76 IlL 816* Owen y. Long, 113 Mass. 408; 
Felyin y. Wiseman, 40 Ind. 148; Shropshire y. Bums, 46 Ala. 108; 
Fonda y. Yaa Horn, 16 Wend. 681. Infancy as a defense is a personal 
priyilege. The contract, though yoidable at the option of the infant, is 
yalid as to third parties who are strangers to both parties to the contract. 
Holmes y. Bice, 46 Mich. 143; Oamer y. Cook, 80 Ind. 881; Oliyw t« 
Hnrdleti 18 Mass. 387; Van Bramer y. Oooper. 8 Johns. 379. 



138 fobmahon of oonrmLcr. Put n. 

Court in WtUiam$ v. Moar^ "that a party may, after he 
attains the age of 21 years, ratify and so make himself liable 
on contracts entered into daring infancy." It may be well 
to remind the reader that such a ratification is, or was, an 
illustration of the limited class of cases in which a past con- 
sideration has been allowed to support a subsequent prom- 
ise.* 

But it would seem tbat ratlfleatlon is of two kinds. — 
And it may perhaps be said that, before the Infant's Relief 
Act,^ the ratification required to make the infant liable upon 
contracts entered into by him during infancy differed, in 
correspondence with a certain difference in kind in the con- 
tracts to which he became a party. Some of these are 
valid unless rescinded, others invalid until ratified. It 
would seem that where an infant acquires an interest in 
permanent property to which obligations attach, or enters 
into a contract which involves continuous rights and duties, 
benefits and liabilities, and has taken benefits under the 
contract, he would be bound unless he expressly disclaimed 
the contract. On the other hand, a promise to perfo'-*** 
some isolated act, or a contract wholly executory, woiA. 
not be binding upon the infant unless he expressly ratified 
it upon coming of age. 

Contracts valid until rescinded. — Illustrations of con- 
tracts which required a special disclaimer to avoid them — 
which were valid unless rescinded — may be found in the 
following cases.^ 

«. n M. ft W. S51 

6. Ante, p. 100. 

«i 87ft 88 VIcl 0.01 

1 AToidiinee.^ First Ezecatorj contracts of an infant may be 
SToided before or after his reaching majority, by his declining perf orm- 
arce and pleading infancy in defense to an action for breach of the ex- 
ecutory contract. Second. Executed contracts, relating to personalty, 
may be rescinded by an infant, both before and after fuU age. Third. 
Hisexecated contracts relating to realty, such as his conveyances of 
land, cannot, as a rule, be rescinded untU he azriTes at majority. Fourth. 
Wbere^ by contract, an infant acquires ao^interest in proper^ of a fixed 



Cbapw m. S 1 INFANTa IW 

Interests in realty and corporate property. — An infant 
lessee who occupies until majority is liable for arrears of 
rent which accrued during his minority.*' Shareholders 
who became possessed of their shares during infancy are 
liable for calls which accrued while they were infants. 
•' They have been trebled therefore as persons in a different 
sitaation from mere contractors, for then they would have 
been exempt: but in truth, they are purchasers who have 
acquired an interest, not in a mere ohiUtel^ hut hi a subject 
qfa permanefnt nature^ either by contract with the 
company, *or purchase or devolution from those PIOTJ 
who have contracted, and with certain obligations 
attached to it which they were bound to discharge, and 
have thereby been placed in a situation analogous to an in- 
fant purchaser of real estate who has taken possession, and 
thereby becomes liable to all the obligations attached Xr 
the estate; for instance,* to pay rent in the case of a lea^^ 
rendering rent, and to pay a fine due on the admission in 
the case of a copyhold to which an infant has been admit- 
ted, unless they have eUcUd to waive or disagree the pur- 
cKaae altogether ^ either during infancy or at full age, at 
either of which times it is competent for an infant to do 
so."* • 

In partnership.— Similarly an infant may become a 
partner, and at Common Law may be entitled to benefits, 

a. Bolle, Abr. 781. 

h. S Burr. 1717. 

«L N. W. & Oow ▼. HoMlchMl, 6 Ex. 114. 

and pennanent nature, his interest may, by his declining to discharge 
the obligations resting on the property, be suspended during his minor- 
ity* bat cannot be wholly avoided until he becomes of fuU age; and his 
retaining land, purchased during minority, and receiving benefits from 
it after reaching his majority, amounts to a confirmation of the pur- 
chase. Hubbard v. Cummings, 1 Me. 11; Dana v. CSoombs, 6 Me. 89; 
Davia v. Dudley, 70 Me. 236; Hook v. Donaldson, 9 Lea (Tenn.), 56; Bool 
V. Mix, 19 Wend. 119; Lovey v. Burd, 94 Ind. 67; Welch v. Bunch, 83 
ind. 882; Stafford v. Roof, 9 Cow. 626; Towle v. Dresser, 78 Me. 257; 
Hardy v. Water, 88 Me. 450; Shipman v. Horton, 17 Conn. 483; Case v. 
dough, 26 N. H. 280; GhUds v. Dobbins, 55 Iowa, 205; Tyler on Infancy 
and GofTWtnr^ 69. 



i40 FORMATION OF OONTRAGT. Ptet IL 

though not liable for debts, arising from the partnership 
daring his infancy.' Equity however would not allow an 
infant, in taking the partnership accounts, to claim to be 
credited with profits and not debited with losses. Bat 
what is important * for our present purpose to note is, that 
unless on the attainment of majority there be an express 
rescission and disclaimer of the partnership, the partner 
will be liable for losses accruing after he came of age. 

Where an infant held himself out as in partnership witli 
Xj and continued to act as a partner till shortly before ha 
came of age, and then, though ceasing to act as a partner, 
did nothing to disaffirm the partnership, he was held liable 
on debts which accrued, after he came of age, to persons 
who supplied X with goods. 

^ Here," said Best., J., ^ ^* the infant, by holding himself ont 
as a partner, contracted a oontinual chligatumj and that ob- 
ligation remains till he thinks proper to put an end to it. 
... If he wished to be understood as no longer contin- 
oing a partner, he aught to have notified it to the viorld!^ 

And so where shares were assigned to an infant* who at- 
tained his majority some months before an order was made 
for winding up the company, it was held that in the ab- 
sence of any disclaimer of the shares the holder was liable 

as a contributory. 
[*108] Contracts inralid nntll ratified.— * Although the 
liabilities incurred by the infant are somewhat dif- 
ferent in these different cases, yet there is this feature com- 
mon to all of them, that nothing short of express disclaimer 
will entitle a man, on attaining his majority, to be free of 
obligations such as we have described. It is otherwise in 
contracts which are not thus continuous in their operation. 
The infant is not bound unless he expressly raUfy them. 

». Good«T.HMriMii,SB.AAJd.l0il 
«L LiiiiiKlen*sGMe,4 0lL8t 



tBuflh T. Unthicom. 119 Md. 84i;Tob7 t. Wood, ISt Mas. 8S; Tbdd 



IIL§1 INFANTa 141 

Sooih being the roles of Common Law upon the subject, let 
OS consider how they have been affected by legislation.' 

Iiord Tenterden's Act requires that ratification, upon 
the attainment of majority, of contracts entered into during 
infancy should be in the form prescribed by the Act, en- 
acting, 

* ^ That no action shall be maintained whereby to charge 
any person upon any promise made after full age to pay 
any debt contracted during infancy, or upon any ratification 
after full age of any promise or simple contract made dur- 
ing infancy, unless such promise or ratification shall be 
made by some writing signed by the party to be charged 
therewith.'* 

The Infant's Belief Act of 1874 went much further in 
the attempt to protect infants from the consequences of 
their attempts to bind themselves by contract. It appears 
to have been designed to guard not merely against the ro* 
suits of youthful inexperience, but against the consequences 

fl.9aMiIV.«ul4,|S. 

1 The more oommon fflastration of oantracts whidh, in this ooontry, re- 
quire a special reecusion to aToid them is an infant's deed of lands. A 
party holding lands under an infant's deed has a good title, sabject to be 
defeated onl j bj the infant's disaflSrmance of the deed. Haynes t. Ben- 
Ii0tt» 63 Mich. 15; Qreen t. Qreen, S8 N. Y. 653; Irvine t. Irvine, 9 WalL 
617; Scranton t. Stewart, S3 Ind. 68; Qoodnow t. Empire Lumber Co. 
81 Minn. 468; Veal t. Fortson, 57 Tex. 483; Illinois, etc. t. Bonner, 75 
HI. 515. Disaffirmance of the deed must be within a reasonable time 
after tne infant reaches his majority ; but what is a reasonable time, and 
irhether there is any limit other than the statute of limitations, is a ques- 
tion upon which the authorities are in conflict Of the decided oases 
the majority are to the effect that the infant is not barred by men 
€bcguie$oenee for a shorter period than that prescribed by the statute of 
limitationfc Boody v. McEenney, 33 Me. 517 ; Dais t. Dudly , 70 Me. 336 ; 
Ptool T. Wfley, 88 Mich. 164; Baker t. Kennett, 64 Mo. 83; Heeth t. 
Osr. Mar. and Dock Co. 56 Md. 807. The authorities are collated in Good- 
sow T. Empire Lnmb. Co. 31 Mmn. 468; 47 Am. R. 738. See also, Rich- 
ardson T. Pate, 38 Ind. 438; WeUs t. Seixas, 34 Fed. Rep. 83; Green t. 
Wilding. 58 Iowa, 673; Bingham t. Farley, 55 Tex. 381; Sims t. Etw- 
hardti 103 U. a 80a 



1 12 FOBMATION OF CONTRACT. Part H. 

of hoDoarable scruples as to the disolaimer of contracts 
upon the attainment of majority. 

" !• • All contracts whether by specialty or by simple oon- 
tract henceforth entered into by infants for the repayment 
of money lent or to be lent, or for goods supplied or to 
be supplied (other than contracts for necessaries), and all 
accounts stated with infants, shall be absolutely void: pro- 
vided always that this enactment shall not invalidate any 
contract into which an infant may by any existing* or 
future statute, or by the rules of Common Law or Equity 
enter, except such as now by law are voidable. 

^* 2. No action shall be brought whereby to charge any 
person upon any promise made after full age to pay any 
debt contracted during infancy, or upon any ratlfi- 
[*109] cation made after full age of any ^promise or con- 
tract made during infancy, whether there shall or 
shall not be any new consideration for such promise or rat- 
ification after full age." 

EflTectof Infant's Belief Act«— The effect of this enact- 
ment IS — 

(a) To make certain sorts of contract absolutely void if 
entered into with infants. 

{b) To prevent any contract with an infant from becomr 
ing actionable as against him, by subsequent ratification. 

And the second section must be taken to override the ef- 
fect of 9 Geo. IV. 0. 14, § 6. 

Of Sect. i. — It has been pointed out before now that the 
first section of this somewhat off-hand piece of legislation 
is not very clear. If a contract for goods supplied or to be 
supplied is vaidj the consequence would be that no property 
in the goods would pass, at any rate under the contract. 

If an infant pays for goods which have not been delivered, 
he can probably ^ recover his money back, and so he could 
have done previous to the Act by avoiding the contract. 

a, 87 ft 18 Viol 0.01 

6. It ii dilBoult to mp poio ttal no remody would bo mfBtMb to tho Inf oat mder 
wadk oireiiimfonooo, but It li honi to ooo htm maj ramodj li avaflaUo m oomItmI* 



^*«ip.IIL|t. INFANTa 14a 

But if the infant receives the goods and pays the price, 
c*n the tradesman recover the goods, and the infant his 
^oney, on the ground that the contract was voidt We 
^U8t take it that delivery of the goods with intention to 
pass the property would pass it, and that money paid for 
the goods (although, the contract being void, the payment 
*8 necessarily made without consideration) could not be re- 
covered back because paid with full knowledge of facts. 
Hence it may be said that the transaction would stand, 
though it must be re^^anied as a «;raiuiious delivery of 
8^8 on the one side, and a voluntary payment of money 
^*^ the other. 

A curious illustration of the eflFect of the Act is [*110] 

afforded by the case of Reg, v. Wilson.'^ An infant 

^flohad contracted trading debts was convicted on an in- 

'c/ment charging him with having defrauded his creditors 

^^Aio the meaning of the Debtors Act, 18^)9.* But the 

^. Action was quashed on the gniund that the transactions 

1 ^^ t*osulted in debts were void under the Infant's Relief 

^ ^here were consequently no creditors to defraud. 

g/^ ^^^t. 2. — The second section requires also to be con 

^^^^^* with reference to the class of contracts which have 

l)Q ^^^^scribed.as ''valid unless rescinded." It can hardly 

'Ha ^^'S^^osed that such an implied rat:lication as continuance 

\j}fJ^ ^^ ••tnershiiK or retention of shares, would be affected 

fl ^^ provisions of the section; but the question must be 

rpi ^^ ^d as open until it receives a judicial interpretation. 

^ 1 ^^V, the section is strong against ratification, such as 

iji ^^^^ the infant hable, appears from the decision in Kilh 

. z^^^^^-se.* There an infant drew a bill of exchange in favour 

■ 5^^ of his creditors, and was sued upon it after he had^ 

^^^ his majority, lie allowed judgment to go by de- 

ind ^Z~^^^«ct had ever been in existence Che infant could avoid it while still executory. 
tf, pi ^V_ V ^^>^er back money which he had paid under it; or he might recover the money 
kfrl|^^ «n a consideration which had wholly failed But. since the Act. the contract 
- ^^ ^ fl never had an existence; and it would seem as though money paid under 11 



ft, ^^^%il folimtarily. 

b. r^^B. D. (C.aR)J«. 

ji^ ^^ ^88Vloi.c.63. 



144 FOBMATIDK OF CONTBACI^ Fkrt H. 

fault, and thus created a debt in the form which we have 
described as a Contract of Record, as solemn a form of rat- 
ification as well could be. The bill had been drawn before 
the Infant's Belief Act came into operation, the jadgment 
was obtained after. The case came before the Ciourt of 
Appeal in Bankruptcy, the question bein^ whether the judge- 
ment debt so created was one upon which a man could be 
made a bankrupt. The Ciourt held, 1st, that sittings in 
Bankruptcy it could look behind the judgment and inquire 
into the consideration for the debt; and 2ndly, that the 
consideration being a contract entered into during infancy, 
and the judgment being in effect a ratification of the con- 
tract, the Infant's Relief Act* prevented ratification, al- 
though the contract was entered into before the Act was 
passed. ^^ The effect of the 2nd section," said Hellish, L. J.^ 

^ was to prevent any action being brought on the 
[*111] bill, although it might have been ratified *after the 

infant came of age. For I am of opinion that that 
section applies to all contracts made by any infants, pro- 
vided the ratification is made after the passing of the Aot^ 
and that it is to be understood as saying that a debt con- 
tracted in infancy shall not in future in any case form a 
valid consideration upon which an action can be brought." 
The infant may enforce the contract* — It must be borne 
in mind that the section does not prevent an infant from 
enforcing a contract (other than those included under sec. 1) ; 
the contract is not void but voidable at his option. His ratifi- 
cation does not give any right to the party who has con- 
tracted with him, but his power of benefiting by the contract, 
if be choose, is not taken away. Equity however will not 
grant specific performance of a contract in which only one 
'side is bound. 

(2) Necessaries— what are they.— We must now con- 
sidw the liability of an infant for necessaries.' 

a.«7A8BVIote.«L 

1 An infant when residing ofe home and under the care of his father^ 
and wqyorted by him, is not liable evea te pepeweriML Hofiv. Cwsej, 



aip^iiL§t. iNFANTa la 

And we mnst first ascertain what are *^ necessaries.'' 

It has always been held that an infant may bind himself 
by contract for the supply to him not merely of the neces- 
saries of life, but of such things as are suitable to his sta- 
tion in life and to his particular circumstances at the time. 
The best discussion of the subject of necessaries is to be 
found in the judgment of Bramwell, B., in Ryder v. WonJh 
vdM^ — a judgment the conclusions of which were adopted 
bj the Exchequer Chamber.^ The difficulty which haa 
arisen in respect of them consists mainly in determining the 
provinces of the Court and the Jury in ascertaining them, 
and the rules applicable to the matter may perhaps be stated 
thus: — 

(a) Evidence being given of the things supplied and the 
circumstances of the infant, the Court determines whether 
the things supplied can reasonably be considered necessaries 
at all; and if it comes to the conclusion that they cannot, 
the case may not even be submitted to the jury. 

Things may obviously be incapable of being necessaries. 
A wild animal, or a steam roller, could hardly, under any 
circumstances, be considered to be such. 

^Things may be of a useful character, but the [*112] 
quality or quantity supplied may take them out of 
the character of necessaries. Elementary text-books might 
be a necessary to a student of law, but not a rare edition of 
"Littleton's Tenures," or eight or ten copies of "Stephen's 
Commentaries." Things necessary to a person in one station 
of Ufe would not be necessary to a person in a different 
station; or, again, things not usually necessary may become 
80 from the circumstances of the infant. 

Medical attendance and expensive articles of food may 
ordinarily be dispensed with, but may become necessary in 
case of ill-health. 

«. L. R. 8 Ezoh. flOi 

». L.B.4Ezc1l81 • 

lU liMS. 899; Wamng t. ToU, 9 Johns. 141; Perrin v. WU«m, 10 Ma 
4S1; AngoU v. McLoUan, IS ICms. 28. 
10 



148 FORMATION OF CX>NTEACT. Part £L 

It does not follow therefore that, because a thing is of a 
useful class, a judge is bound to allow a jury to say whether 
or no it is a necessary under all the circumstances of the 
case.^ 

(b) ProTinces of judge and jury. — If the judge conclude 
that the question is an open one, and that the things sap- 
plied are such as may reasonably be considered to be neces- 
saries, he leaves it to the jury to say whether, under the 
circumstances of the case, the things supplied were neces- 
saries as a fact. And the jury determines this point, taking* 
into consideration the character of the things supplied, the 
extent to which the infant was already supplied with them, 
and the actual circumstances of the infant. We say '^ actual 
circumstances/* because a false impression which the infant 
may have conveyed to the tradesman as to his station and 
circumstances will not affect his liability.* If a tradesman 
supplies expensive goods to an infant because he thinks that 
the infantas circumstances are better than in fact they are, 
or if he supplies goods of a useful class not knowing that 
the infant is already sufficiently supplied,^ he does so at his 
peril. 

(c) Of Court in bane and of Appeal. — The ruling of the 
Court and the finding of the jury are both alike subject to 
review by a Divisional Court sitting in banc and by succes- 
sive Courts of Appeal. 

Infant may not be charged upon contract fk*amed 
[*113] as a tort. — *An infant is liable for wrong, but a 

m. Bray«haw ▼. Eaton, 7 Scott, at p. 167. 
b. Barnes ▼. Toye, 18 Q. B. D. 410. 

^ The question as to what are necessaries in a given oaae is a mixed 
question of law and fact. The rule by which we determine whun it 
in to be answered by the court, and when by the jury, is sometimes stated 
as follows: Whether the articles furnished are of a name and quality 
coming within the denomination of necessaries is ezclusiTely a question 
of law for the court, but the quantity, that is to say, to what extent the 
articles are necessary in the given case, is a question of fact for the jury. 
Bent V. Manning, 10 Verm. 230; Strong ▼. Foote, 43 Conn. 208; Par- 
tons y. Keyee, 48 Tex. S57 ; Stone y. Denniaon, 18 Pick. 7; 1 Para. Ooni. 
«S81 



€biip. m. 8 8. CORPORATIONa 147 

breach of contract may not be treated as a wrong so as to 
make the infant liable; the wrong must be more than a mis- 
feasance in the performance of the contract, and must be sep> 
arate from and independent of it.^ Thus where an infant 
hired a mare and injured her by over-riding, it was held 
that he could not be made liable upon the contract by fram- 
ing the action in tort for negligence. Kor can an infant be 
made liable for goods sold and delivered by charging him 
in trover and conversion, a rule which it is not unimportant 
to bear in mind, inasmuch as the Infant's Relief Act makes 
a sale of goods to an infant absolutely void, and so would 
appear to prevent any property from passing to him. 

Bat may for actual tort, though originating in eon- 
tract. — But when an infant hired a horse expressly for rid- 
ing and not for jumping, and then lent it to a friend who 
jumped the horse and killed it, he was held liable; for* 
^^ what was done by the defendant was not an abuse of the 
contract, but was the doing of an act which he was expressly 
forbidden by the owner to do with the animaL" * 

§ 3. Corporations, 

1. Necessaiy limits to its contractual capacity. — A 

corporation is an artificial person created by law. Ilence 
the limitations to the capacity of a corporation for entering 
into a contract may be divided into necessary and express. 
The very nature of a corporation imposes some necessary 

«. Jenningi t. Ruadall, 8 T. R. 88S. 

1 Gibson v. Spear, 88 Vt. 311 ; Homer y. Thwing, 8 Pick. 492 ; Eaton ▼. 
Hfll, (K) N. EL 235; Freeman v. Roland, 14 R. L 89; Rayy. Tubba, 60 Vt 
688; Penrose v. Curren, 2 Rawle, 861; Mathews v. Cowan, 69 HL 841, 
West y. Moore, 14 Vt. 447 ; CampbeU y. Perkins, 8 N. Y. 44a 

There are decisions to the contrary, Ward y. Vance, 1 Nott Sc McCor<^ 
(a C.\ 197; Peigne y. Sutclifte, 4 McCord (a C), 887; Felts y. HaU, 9 N 
H. 441 ; but they are not in accord with the weight of authority. Bigelo^ 
on Ftand, 860. See EweU*s Leading Cases, 206, where the American au- 
thorities on the liabilities of infants for their torts are yery fully ooUated, 

1 Hamer y. Thwing, 8 Pick. 492; OampbeU t. Stakes, 2 Wend. 187, 
rnmuokT. BoUmd, 14 R. L 89;Bojt. Tabbs, 60 Vt, 688. 



148 FORMATION OF CONTRACrT. Part H 

restrictions upon its contractual power, and the terms of its 
incorporation may impose others. 

Must contract through an agent. — A corporation is an 
artificial entity, apart from the persons who compose it; 
their corporate rights and liabilities are something distinct 
from their individual rights and liabilities, and they do not 
of themselves constitute the corporation, but are only its 
members for the time being. Since then a corporation has 
this ideal existence apart from its members, it follows that 
it cannot personally enter into contracts, it must contract 
by means of an agent. It '^ cannot act in its own person, 

for it has no person." • 
[*114] Cannot make negotiable instruments.— *And the 

Common Law rule that a corporation can only con- 
tract under seal puts this further limit upon its contractual 
powers, that it cannot as a rule make negotiable instru- 
ments. For by the law merchant an instrument under seal 
is not negotiable, and therefore, unless the bills of exchange 
and promissory notes be part of the ordinary business of a 
trading corporation, they cannot be made by these artificial 
persons.^ 

2. Express limitations. — The express limitations upon 
the capacity of corporate bodies must vary in every case by 
the terms of their incorporation. Much has been said and 
still may be said as to the effect of these terms in limiting 

a, F«r Lord Cairni in T&egustm t. Wll8on« 8 Ch. 90. 

1 The rule that oorporatioiis can only contract under seal is abrogated 
in this country. They can be bound, without note or deed, by impUoa- 
tion from corporate acts. Like natural persons they may ratify any act 
which they can perform, and contract by parol as weU as under seaL 
Proprietors of Canal Bridge v. Gordon, 1 Pick. 297 ; Bank of Ck>lumbia 
V. Patterson, 7 Granch, 299; School District t. Wood, 18 Mass. 199; Dan- 
forth V. Schoharie Tump, Co. 12 Johns. 227 ; Hannibal Bank v. North 
Mo. Coal Co. 86 Mo. 125; Mt. Washington Hotel Co. v. Marsh, 63 N. H. 
830 ; Regents v. Detroit, 12 Mich. 188 ; Bank of United States v. Dandridge, 
12 Wheat. 64; Town of Athens v. Thomas, 82 Dl. 269; Christian Church 
r. Johnson, 68 Ind. 278 ; Paret v. City of Bayonne, 89 N. J. I* 659; Moai 
▼. Averell, 10 N. T. 454; Blunt y. Walker, 11 Wis. 884. 

Bee awU, 61, n. 



Chap. IIL § a. OORPORATIONa 140 

the oontractual powers of corporations, bat it is not a part 
of the objects of this book to discuss the doctrine of *^ Ultra 
vires." • The question whether the terms of incorporation 
are the measure of the contracting powers of the corpora- 
tion, or whether they are merely prohibitory of contracts 
which are inconsistent with them, was discussed in the much 
litigated case of The Aahbwry Cwrriage Compwny v. Riohe^^ 
and the question was thus stated and answered by Black* 
burn, J. : — 

'' I take it that the true rule of law is, that a corporat 
at Common Law has, as an incident given by law, the same 
power to contract, and subject to the same restrictions, that 
a natural person has. And this is important when we come 
to construe the statutes creating a corporation. For if it 
were true that a corporation at Common Law has a capacity 
to contract to the exterU given it ly the instrument creating U 
and nofurtherj the question would be. Does the statute 
creating the corporation by express provision or necessary 
implication show an intention in the legislature to confer 
upon this corporation capacity to make the contract! But 
if a body corporate has, as incident to itj a general capacity 
to contract^ the question is, Does the statute creating the 
corporation by express provision or necessary implication 
show an intention in the legislature to prohibit, and so avoid 
the making of a contract of this particular kind?" 

*The House of Lords appear not to have dissented [*115] 
from the view of the general powers of corpora- 
tions expressed by Blackburn, J., but they differed from 
him and overruled his judgment upon the interpretation 
of the statute under consideration; holding that a company 
incorporated under the Companies Act of 1862 is so far 
bound by the terms of its memorandum of association that 
it may make no contracts which are either inconsistent with, 
or foreign to, the objects expressed in that memorandunL* 

&L.B.7H.L.6Sa. 

6. In Bzeh. Oh. L. B. 9 Bzeh. SM. 

1 The rule in this ooantry is that a oorporstion has the power to make 
any sach contracts as further the purpose of incorporation and are nol 



150 FORMATION OF CONTRACT, Part II. 

Contracts ultra rlres not Told for illegality^ bnt for 
Incapacity. — A contract made tdtra vires is void; it iB 
sometimes said to be void on the ground of illegality, bat 
Lord Cairns in the case above cited takes exception to this 
Qse of the term ''illegality," pointing out that it is not the 
object of the contracting parties, but the incapacity of one 
of them, that avoids the contract.^ 

§ 4. Lunatic and drunken persons. 

The contract yoJdable.— The law with regard to con- 
tracts made with lunatics and persons in a slate of intoxi- 
cation may be said to be now settled as follows. The 
contract of a lunatic or drunken person is voidable at his 
option if it can be shown that at the time of making the con- 
tract he was absolutely incapable of understanding what he 
was doing, and that the other party knew of his condition. 
It seems doubtful, even in the case of executory contracts, 
whether the transaction can be avoided on the ground of 
lunacy or drunkenness as against a contracting party who 
had no reason to suppose that he was dealing with an in- 
prohibited bj its charter or some statute binding upon it. In general, 
an express authority to make a given kind of contracts is not indispenBa- 
ble, provided they are not foreign to the corporate purpose. Booth y. 
Robinson, 55 Md. 419; Wayland University v. Boorman, 56 Wia. 657: 
State ▼. Rire. 65 Ala. 83; SeariKht v. Payne. 6 Lea (Tenn.). 283; Clove- 
land & Mahoning R. R. Co. v. Himrod Furnace Co. 87 Ohio St. 821 
Dodge V. Council BlutTs, 57 Iowa, 5t>0; Ba^sett v. Monte Christo Mining 
Co. 15 Nev. 293: Detroit v. Mutual Gas Co. 43 Mich. 594; Indiana y. 
Worinan, 6 Hill, 83; Bangor Boom Co. v. Whiting, 29 Me. 123; Marine 
Bank ▼. Ogden, 29 UL 248; Eureka Flour Mills y. Smith, 6 Cal. 1; Mo68 
y. Averell, 10 N. Y. 457. 

> In Bissell v. The Michigan Southern dc Northern Indiana R. R. Ca 
82 N. Y. 269, Conistock, C. J., said : " The words ultra vires and Ulegal- 
ity represent totally different and distinct ideas. It is true that a 3on- 
Cract may have both these defects, Init it may also have one without the 
other." Allen, J., said in Whitney Arms Co. v. Harlow. 63 N. Y. 68 
•* When acts of oorinirations are s^ntken of as ultra vires it is not intended 
that they are unlawful, or even such as the corporation cannot perfc^m, 
Imt merely those which are not within the powers conferred upon th« 
oorpotation by the act of its creation.'' 



Qiap. HL § i. LUNATIC AKD DRUNKEN PERSONa 151 

capable person. But it is safe to say that where a contract 
has been execated in part, so that the parties cannot be 
restored to their former positions, proof of the actual in- 
sanity of one of the parties at the time of making the con- 
tract, onaccompaniea by any proof that the other knew of 
his condition, will not suffice to avoid the contract. 

Of Lunatic. — Thus, in Molton v. Camroux^^ a lunatic 
purchased annuities of a society, paid the money, and 
died. His administratrix *sued the society to re- [*116] 
cover back the money on the ground that the con- 
tract was fx^Vi. The jury found that at the time of the 
purchase the vendee was insane and incompetent to man- 
age his affairs, but that there was nothing to indicaio this 
to the company, and that the transaction was honafide. It 
was held that the money could not be recovered. " The 
modem cases show," ^ said Patteson, J., ^^ that when that 
state of mind was unknown to the other contracting party, 
and no advantage was taken of the lunatic, the defense can- 
not prevail, especially where the contract is not merely 
executory, but executed in the whole or in part, and the par- 
ties cannot be restored to their original position."^ 

•. tBxclL489: 4Kxch. 17. 
k4BxclLlfi. 

^ MoltoB V. €amroax.— In Seaven ▼. Phelps, 11 Pick. 804, it was held 
that it 18 not a legal defense that the defendant, at the time of his deal- 
ings with plaintiff, was not apprised of his being insane, and had no 
reason to suspect it, and did not overreach him, nor practice any fraud 
or unfairness. " The fairness of defendant's conduct cannot supply the 
plaintiff's want of capacity.** Fitzgerald ▼. Reed, 9 Sm. ft MarshaU; 
Pearl v. McDoweU, 8 J. J. MarshaU, 658; Anglo-Califomian Bank v. 
Ames, 27 Fed. Rep. 727. Many courts follow Seavers v. Phelps (»upra) 
to (he extent of holding that where the insane person received no ben- 
«ftt under the contract, the contract cannot be enforced against him, 
and if executed he may recover whatever of value he parted with, not- 
withstanding the other party to the contract may have acted in good 
faith, without knowledge of the infirmity. Van Patton v. Reals, 48 
Iowa, 08; Northwestern Mutual Ins. Co. t. Blankenship, 94 Ind. 685; 
liDoohi T. Buckmaster, 32 Vt. 658. Some courts hold that the deed ol 
aa insane person, who never recovers his reason, is void, and that in an 
•otton lo reoorer the land by his heixs it is no defense to show that his 



1«S FORMATION OF CX)NTBACI. Ftei JX 

A lunatic, bo found by commission/ is not therefore al> 
solutelj incapable of contracting/ but the presumption im 
yerj strong in such a case that the contract was not made 
during a lacid interval, and that the other contracting party 
was aware of the mental condition of the lunatia* 

Or drunken person. — A contract made by a person in 
a state of intoxication may be subsequently avoided by him, 
but if confirmed is binding on him. In the case of Ma^ 
thews V. BaoBter^ a man, while drunk, agreed at an auction 
to make a purchase of houses and land. Afterwards, when 
sober, he affirmed the contract, and then repented of his 

a. CommlMioni de luinatico inqnirendo are no longer ianiad specinllj In encb tmmm 
of ^effA Inaani^. A general oommiwion is now, by 16 and 17 Vict a 7D, iMued tx^nBk 
time to time, under the Great Seal, to UaMten in Lunacy appointed by that Act, wIm> 
oonduct an Inquiry in each caae in a manner prescribed by the Act 

6. Per Lotd Langdale, M. &, Snook ▼. Watts, 11 BeaT. at pi 107; HaU t. WarroB, • 
Vfls. 005. 

A L. & 8 Bzch. 181 

grantee purchased in good faith. Rogers v. Black well, 49 ICich. 183; 
Vandusen y. Sweet, 61 N. T. 378; Dexter ▼. Hall, 16 Wall 9; Somers ▼. 
Pumphrey, 24 Ind. 231. The rule, however, announced in Seavers ▼• 
Phelps is not, hy weight of authority, law in this country. 

The case of Molton ▼. Camrouz, cited by the author, has been ex- 
pressly followed and applied in Eaton ▼. Eaton, 87 N. J. L. 118; Rilej 
y. Albany Savings Bank, 36 Hun (N Y.), 519; Mutual Life Ins. Go. ▼. 
Hunt, 79 N. Y. 641; Belu^ns y. McKonzie, 23 Iowa, 833; Young ▼. 
Stevens, 48 N. H. 186; Fay v. Burditt, 81 Ind. 433; Scanlon y. Cobb, 86 
m. 296; Mathieson v. McMahon, 88 N. J. U 537. And to the same 
effect are Gribben v. Maxwell, 34 Kans. 8; Burnham v. Kid well, 118 
m. 425; Beala v. See, 10 Pa. St. 56; Lancaster Bank v. Moore, 78 Pa. 
St 407; Shelters v. AUen, 61 Mich. 531; Wilder v. Weakly, 84 Ind. 18U 
The cases will disclose that one dealing with an insane person, and not 
knowing his condition or any facts to put him on his Kuard, will be pro- 
tected by the courts of law and equity against such person^s repudiating 
his contract on the ground of his mental incapacity : but the rule is not 
A technical one to be relied on at all times and under all circumstanoea. 
It is applied in each case only to prevent a wrung being done, and is 
based on the principle that *' the law will not permit the lunations in- 
firmity to be made an instrument of fraud.** 

iLniiaties nndor guardianship.— The deed of a non-sane penon, 
after being placed under guardianship, is absolutely void. Wait ▼. Max- 
well, 5 Pick. 217; Ingraham v. Baldwin, 9 N. Y. 46; RiwMlk T. 
Oernar, 80 Mo. 477. 



JJL%IL IIARRTKl) WOMEf. 158 

bargun, and when sued on the contract pleaded that he waa 
drank at the time he made it Bat the Court held that 
although he had once had an option in the matter and 
might hare avoided the contract, he was now bound by his 
affirmation of it. "I think," said Martin, B., 'Hhat a 
drunken man, when he recovers his senses, might insist on 
the fulfillment of his bargain, and therefore that he can 
ratify it so as to bind himself to a performance of if ' 

The rules of equity are in accordance with those 
of common *law in this respect. Under such cir- [*117] 
cumstances as we have described. Courts of Equity 
will decree specific performance against a lunatic or a 
person who entered into a contract when intoxicated, and 
will on similar grounds refuse to set aside their contracts. 

§ 6. Married Women. 

At common law. — Until the 1st of January, 1883, it was 
true to state that, as a general rule, the contract of a mar- 
ried woman was void. 

Yet there were exceptions to this rule: in some cases a 
married woman could make a valid contract, but could not 
sue or be sued apart from her husband; in others she could 
sue but could not be sued alone; in others she could both sue 
and be sued alone.' 

1 In order to avoid the deed or oontract there must he that state of 
ezoeeriTe drunkennesB which depriyes the person of the oonsdonsneas 
of what he is doing. EweU*8 Leading Gnuses, 738; MiUer t. Finlj, 8S 
Mich. 254 ; Gaulkins ▼. Fry, 85 Conn. 170. That the contracts made by 
a penon in a state of. intoxication may be ratified, Lyon ▼. PhiUips, 
106 Pa. St. 67. 

*The common law rules stated by the anther regarding the disabili- 
ties of a married woman to contract are recognised in the states gener- 
aUy as remaining except so far as removed by statute. In some states 
she may contract as a feme eole unqualifiedly, but in others only as to 
her separate property. Modem legislation has made such sweeping 
changes in her rights and power to contract, and the statutes of the 
seTeral states upon the subject are so dififerent, that a review of them 
here would be out of place. See Bishop on Law of Manied Women. 



154 FOBMATION OF CONTRACT. Ptet IL 

(i) A marriod woman might acquire contractual rights 
by reason of personal services rendered by her, or of the 
assignment to her of a ckose in action.^ In sach cases the 
husband might ^^ reduce into possession " rights of this nat* 
ore accruing to his wife, but unless he did this by some act 
indicating an intention to deal with them as his, they did 
not pass, like other personalty of the wife, into the estate 
of the husband. They survived to the wife if she outlived 
her husband, or passed to her representatives if she died in 
his life-time. 

(2) The wife of the king of England " is of capacity to 
grant and to take, sue and be sued as 9k feme edUy at the com- 
mon law." * 

(3) The wife of a man civiliter mortuue^ had similar rights. 

(4) The custom of the City of London enabled a married 
woman to trade, and for that purpose to make valid con- 
tracts. She could not bring or defend an action upon these 
unless her husband was joined with her as a party, but she 

did not thereby involve him in her trading liabilities. 
[*118] *(5) A group of exceptions to the general role 
was created by the Divorce and Matrimonial Causes 
Act* 

A woman divorced from her husband is restored to the 
position of ^feme sole. 

Judicial separation, while it lasts, causes the wife ^^ to be 
considered as a feme sole for the purpose of con^tract, and 
wrongs and injuries, and suing and being sued m any judi- 
cial proceeding." § 26. 

And a wife deserted by her husband, and having obtained 
a protection order from a Magistrate or from the Court, is "in 
the like position with regard to property and contracts, and 
suing and being sued, as she would be under this Act if she 
had obtained a judicial separation." § 21. 

«. Bnahford ▼. BuddnghAm, Cro. Jao. 77; Dalton ▼. Hid. Ooob. & Oo. IS a B. fm 
k Co. Utt. 138a. 

c. ClTil deaUi taiaet from outlawry, or from beinc under oooTlctkm for Uiamj, tmd 
tamiiarty from being "profened In reUgioa.** 
± ll)AtlVloko.8k 



Oiap. m. § S. MARRIED WOMEN. 165 

(6) The Married Woman's Property Act (1870)* apeei- 
fied yaiioas forms of property as the separate estate of 
married women. And by § 11 of the Act, a* married woman 
oculd maintain an action in her own name ^^ for the i^eooy- 
ery of any wages, earnings, money and property by that 
Act declared to be her separate property," and she was 
given all remedies, civil and criminal, for its protection, 
which an unmarried woman would have had under the cir- 
cumstances. A married woman might therefore make a 
contract for the exercise of her personal labour or skill, and 
maintain an action upon it alone. 

The Act thus constituted a separate estate and gave power 
to contract in respect of it, and this separate estate became 
liable for the engagements entered into with a married 
woman on the faith of it But, though the wife could sue 
alone for her separate property, she could not, with some 
minor exceptions, defend alone any action brought in respect 
of it, or on engagements entered into with her upon the 
faith of it* Her husband must be joined as a party to the 

BQit 

(7) Equitable separate estate. — The nature of the equi- 
table separate estate of married women is set forth in the 
judgment of Turner, L. J., in Johnson t>. OaUagher.^ " Courts 
of Equity," he says, ^^ have through the medium of trusts 
created for married women rights and interests in 
property, both real and personal, * separate from and [*119] 
independent of their husbands. To the extent of the 
riglUs and vntereste thus created a married woman has, in 
Courts of Equity, power to alienate, to contract, to enjoy. 
She is considered a feme sole in respect of property thus 
settled or secured to her separate use." 

But the limitations on this power should be noticed. The 
wife could not sue or be sued alone in respect of the sepa- 
rate estate. 

k Haaoook ▼. Labi«A>, I a P. IK ttl 
ftiD.F.JkJ.«l 



106 FOBMAHON OF OONTRACT. FtetIL 

She did not acqnire "a sort of equitable status of oa 
pacity to contract debts '' * in respect of any separate estate 
whensoever acquired. She could only bind such separate 
estate as was in her possession or control at the time tlie 
liabilities accrued. The presumption was extremely strong 
that every engagement entered into by a married woman 
was entered into on the faith of her separate estate, but 
she could not bind herself, nor could she create liabilities in 
excess of her estate, her creditor's remedy lay not against 
her but against her property. ^^ When she by entering into 
an agreement allows the supposition to be made that she 
intends to perform the agreement out of her property, she 
creates a debt which may be recovered, not by reaching ker^ 
hit by reaching her property?^ * 

The Married Women's Property Act 1882 affects:' 

(1) Every woman married after 1882. 

(2) Every woman married before 1883 as respects prop- 
erty and choeea in action acquired after 1882. 

It repeals the Married Women's Property Act 1870,' and 
the amending Act of 1874; and its effect, so far as relates 
to our present subject, may be summarized as follows: 

All property, real or personal, possessed by a woman be^ 
fore, or acquired after marriage, is her separate property. 
She can acquire, hold, and dispose of it by will or other- 
wise, '^as her separate property in the same manner as if 
she were a ferns ecle without the intervention of any 
trustee.^' 

But property may still be settled upon her in trust, and 
the may be restrained from anticipating property so set- 
tled. 
[•120] * ^^ In respect of and to the extent of her separate 
property," a married woman may enter into con- 
tracts and render herself liable thereupon as though she 

«. lUrtiBT. flteOfbbon. ITCh. D.4W. 

V, Fwr. LoidBiillMrty.PloudT. HiM,ICk.0L 

iitfaTeviot&TB. 
tf.»AMVioicfli:ra»vioi«.«i 



Gh^nLgfi. MARRTWT) WOMEN, 107 

were f^tM 90U. Every contract entered into by her is to 
be deemed to be entered into in respect of her separate 
property, to bind it nnless the contrary is shown, and not 
only the property which she is possessed of, or entitled to 
at the date of the contract, "bnt all that she may sabse- 
qoently aoqoire. And on sach contracts she may sue and 
be sned, without joining her husband as a party to the suit. 

The liability upon these contracts does not appear to be 
personal, but to rest upon the separate estate, and to be 
limited by the extent of such estate. Where a joint judg- 
ment is given against husband and wife, it is to be given 
^'against the husband personally, and against the wife as to 
her separate property : " and it is only in the case of a wife 
trading apart from her husband, that she is made subject 
to the bankruptcy laws in the same way as if she were/^iM 
96U, 

The act therefore appears to be, as it has recently been 
described in the House of Lords, a large extension of the 
doctrine of separate estate.* It is enough here to point out 
the general effect of its provisions, which will doubtless be 
illustrated and explained by abundant litigation in the 
future. 



• F»Loid8dberMteOAklDT.Otfin,tApi^Okalpi 



CHAPTER I\r. 
Reality of Consent. 

Thx next feature in the Formation of Contract which has 
to be considered is Genuineness or Beality of Consent; ajid 
the question which, under this head, recurs in various forms 
is this: Given an apparent Agreement, possessing the ele- 
ment of Form or Coasideration, and made between parties 
capable of contracting, was the consent of both or either 
given under such circumstances as to make it no real ezpres> 
sion of intention } 

And where this question has to be answered in the affirma- 
tive there may be various causes for unreality of consent. 

(i) Mistake. — The parties may not have meant the same 
thing; or one or both may, while meaning the same things, 
have formed untrue conclusions as to the subject-matter of 
the agreement This is Mistake. 

(ii) Misrepresentation. — One of the parties may have 
been led to form untrue conclusions respecting the subjeot- 
matter of the contract by statements innocently made, or 
facts innocently withheld by the other. This is Misrepre- 
sentation. 

(iii) Fraud. — These untrue conclusions may have been in- 
duced by representations of the other party made with a 
knowledge of their untruth and with the intention of de- 
ceiving. This is Fraud. 

(iv) Duress. — The consent of one of the parties may 
have been extorted from him by the other by actual or 

threatened personal violence. This is Duress. 
[♦122] *(v) Undue influence. — Circumstances may rendei 
one of the parties morally incapable of resisting the 
will of the other, so that his consent is no real expression 
of intention. This is Undue Influence. 

And flrst let us deal with Mistake. 



Gbap^IY.gt MISTAEB. IM 

§ 1. Mistake* 

Mistake of Intention distinct from mistake of expres- 
sion. — We most preface our remarks on Mistake by distin- 
gaishing Mistake of intention from Mistake of expression. 
As regards the latter we may say that there are certain 
cases where the parties are genuinely agreed though the 
terms in which their agreement is expressed would hinder 
or peryert its operation. In such cases they may be per- 
mitted to explain or the Courts are willing to correct their 
error. 

But this is part of the interpretation of Contract. We are 
here concerned with its Formation and have to consider 
how far Mistake will vitiate an agreement which is, on the 
face of it, valid. 

The cases in which it does so are exceptions to an almost 
nniversal rule that a man is bound by an agreement to which 
he has expressed his assent in unequivocal terms, unin- 
fluenced by falsehood, violence, or oppression. ^ he has 
exhibited all the outward signs of agreement the law will 
hold that he has agreed. 

The subject has been rendered confusing in two ways. One 
of these comes from a practice adopted even by the most 
learned and acute writers of blending the subjects of Mis- 
take and Failure of Consideration. If a man alleges that a 
contract to which he was a party has not been duly per- 
formed, or has altogether failed of performance, the question 
is, not whether he contracted at all, but whether the terms 
of the contract justify his contention. A man who knows 
with whom he is dealing, and the nature of the transaction 
which he desires to effect, has only himself to blame if the 
terms of the contract do not bind the other party to 
carry out the ^objects of agreement or to pay [*123J 
damages for non-performance. If it appears that 
they do not do so, then, though he may have thoug 
otherwise, this is not Mistake. If it were so a contract 
woold become no more than a rough draft of the intentions 



IM FORMATION OF OONTBACI. . Pttrt IL 

of the parties, to be explained by the light of sabsequent 
events, and corrected by the Court and jury. The qacBtion 
in such cases is whether, or no, the performance corresponds 
to the terms of the contract, not whether, or no, the terms 
of the contract correspond to the intention of the parties.* 

The other source of confusion arises from attempts, 
inherited from Soman Law, to ascertain the state of 
mind of the parties and to distinguish error common to 
both from error which has misled one. We have only to 
look at the matter from the point of view of the party 
seeking to be relieved. If A^s mind never met X's it is 
immaterial to what X's mind was directed. The parties 
have not agreed, though it does not follow that they may 
not so have expressed themselves as to involve the conse- 
quences of agreement. 

As a matter of fact community of error is merely an 
incident of certain forms of Mistake which the Ciourts will 
relieve. 

Mistake 08 to (he nature of the traneaotion} 

What makes It operative^ and distinct fhim fk'and.— 

This must needs be of rare occurrence, for men are not apt 

a. air. Benjamin in hit chapter on '* Uistate and nuiure of Conrfderation ** Indloatei 
that the Mistake therein deecribed does not go to the Formation of Contract Mr. Pol- 
look, also, pp. 48(^7, Introduoes the subject of Performance Into his chapter on Mle- 
take, dting such cases as Oomperts ▼. Bartiett, 2 E. A a 840; Oonder ▼. Hall, 8 a B. N. 
a.tt; and Kennedy ▼. Panama and Royal Mall Steam Oa L. B. 8 Q. a 680, which deal 
•oleiy with the performance of terms agreed upon. I cannot but think, for reasons 
glf«i on page 188, that such references may mislead. 

ilnRaplejv. D^gett,74m. 851, it is held that a mntual mistake aa 
to price (as where aeUer asked $165, hut hujer understood him |65) 
Titiates a sale, and although the article is deliyered no title passes as be> 
iween the parties. Hartford, eta B'y Ca ▼• Jackson, 24 Conn. 614 
An interesting case illustrative 6t a mistake in the nature of the trans- 
action has been reoentl j decided by the Biichigan supreme court (July, 
1887), Sherwood ▼. Walker, 88 N. W. R. 919. Defendant sold to plaint- 
iff a blooded oow for the sum of |80, both parties to the contract suppos- 
ing the oow was barren. Before the time for deliyery arrived defendant 
discovered that the oow was with calf, whereupon he rescinded the sale 
and declined to deliver. Am a breeder the cow was worth from #760 to 



IV. g 1. lOSTAKE. 161 

to enter into engagements as to the natnre of which they 
are wholly in the dark. It must also arise ahnost of neoee- 
sity from the misrepresentation of a third party. For if a 
man be capable of understanding the natore of a 
docnmenty he *cannot avoid its operation by saying [*124] 
that he did not apply his mind to its contents, or 
that he did not suppose that it would have any legal effect* 
He must therefore have been induced to contract by some 
deceit which ordinary diligence could not penetrate. And 
this, in order to result in Mistake, must, ex vi terminiy pro- 
ceed from some third party, for otherwise the contract 
would be voidable for misrepresentation or fraud, and 
would not be void on the ground of Mistake. 

Ulustrations. — The two following cases will be found to 
furnish the best illustrations of Mistake of this nature. In 
ThorotighgoocPa case * the plaintiff executed a deed which he 
was told was a release of arrears of rent, though in fact it 
was a release of all claims. He was an illiterate man, the 
deed was not read to him, and when its effect was mis- 
represented to him in the manner described, he said, ^^ if it 
be no otherwise I am content," and executed the deed. It 
was held that the deed was void. 

In Foster v. Maokinnan^ the acceptor of a bill of ex- 
change induced the defendant to indorse it, telling him that 
it was a guarantee.^ The plaintiff was a subsequent bona 



rT.Waltera.L.&7aL81 
kiOo-Beikft. 
iLL.&4aP.7M. 



$1,000. FlaintifEfaroaghtrepleyiiL The court held that the right of reecia- 
ikm was properly exerciBed ; that the mistake or misapprehension of the 
perties went to the whole sahstance of the agreement. Sherwoodi J., dis- 
■ented on the ground that the mistake was as to the quality of the thing 
•old, which brought the case within the rale stated by our author, p. 
180. 

>Fo8ter T. Maeklnnon has been expressly foUowed in Gibbs ▼• Lina- 
bory, 22 Mioh. 479; Whitney t. Snyder, 2 Lans. 477; dine t. Guthrie, 
42 Ind. 280; Walker ▼. Ebert, 28 Wis. 194; Detwiller v. Bish,44 Ind. 70; 
CkvbjT. Weddle, 07 Ma 452; Piffer ▼. Smith, 57 HI 527; First N. & 
▼. Lesrman, 5 Neb. 247; Bowsn t. Thomas, 02 Wis. 480; Sopsr "i Feok. 
11 



m FORMATION OF OONTRACTT. Piit H 

fide indorsee of the bill, for value. It was held that the 
defendant's signature did not bind him. The Court said 
that it was ^^ plain on principle and on authority that if a 
blind man or a man who cannot read, or who for some 
reason (not implying negligence) forbears to read, has a 
written contract falsely read over to him, the reader nails- 
reading to such a degree that the written contract is of a 
nature altogether different from the contract pretended to 
be read from the paper which the blind or illiterate man 
afterwards signs; then, at least if there be no negligence, 
the signature so obtained is of no force. And it is invalid, 
not merely on the ground of fraud, where fraud exists, bat 
on the ground that the mind of the signer did not acoon^ 
pony the signature; in other words, that he never intended 
to sign, and therefore in contemplation of law never did 
sign, the contract to which his name was appended." 
[*125] *But it will be noted that the absence of negli- 
gence is strongly dwelt upon by the Court, and that 

51 Mich. 608; Baldwin y. Bricker, 86 Ind. 221; DeCamp y. Hanns, 29 
Ohio St 467. While the principle announced in Foster t. Mackinnon ia 
generaUy recognized by our courts, stiU the contract is not held inyalid 
■imply because " the mind of the signer did not accompany the signa- 
ture,'* and, through fraud, he was induced to sign an instrument ma- 
terially different in legal effect from what had been represented to liim. 
Before he can succeed in his defense against a bona fide holder of nego- 
tiable paper, on the ground that the intent did not go with the act, he 
must show that he was not guilty of negligence in signing the paper. 
In nearly eyery state in the Union, except Michigan and Wisconsin, it 
has been decided that, when a party in full possession of« his faculties 
and able to read, though with difficulty, signs a negotiable instrument 
under the belief that it is a contract of a different character, and does so 
without HimaAlf reading the instrument, but relying on the reading and 
representation of another, the executing the note under these circum- 
stances is such negligence on his part as will render him liable thereon 
to a bona fide holder. Douglass y. Malting, 29 Iowa, 408; Chapman y. 
Rose, 66 N. T. 187; Ort y. Fowler, 81 Eans. 478; Baldwin y. Barrows, 
86 Ind. 851; Mackey y. Peterson, 29 Minn. 299; Carey y. Miller, 25 
Hun, 28; Williams y. StoU, 79 Ind. 80; Fisher y. Van Behren, 70 Ind. 
19; RuddeU y. DiUman, 78 Ind. 518; Leach y. Nichols, 55 IlL 278; Bo38 
V. Doland, 29 Ohio St 478; 1 Danl. on Neg. Inst 850-854; WeUer's Ap- 
peal. 108 Pa. St 694. 



Cbmp.TV.%1. mSTAKB. 16t 

the jury had expressly negatived its existence in the circnm- 
■tances of this particular case. Hunter v. Walters'* seems 
to show that if a man executes a deed which he might have 
read and was capable of understanding, he cannot avoid it 
on the ground that he did not read it or was misinformed 
of its contents and intended application, or that he under- 
stood that it was a mere form. 

Mistake as to the person with whom the oontraot is made. 

Mistake of this kind arises where A. contracts with 2l 
believing that he is contracting with M. It can only arise 
where A has in contemplation a definite person with whom 
he desires to contract: it cannot affect general offers which 
any one may accept, as, for instance, contracts by advertise- 
ment or sales for ready money. 

Mistake of party. — Where A intends to contract with 
Jf, X cannot make himself a party to the contract by sub- 
stituting himself for M. And the reason for this rule is 
twofold. A looks to the credit and character ot M. It X 
is put in place of Jf, A does not get what he bargains for. 
Ajid further X is never present to A^s mind in the forma- 
tion of the contract. So J. is no consenting party to a 
contract made with X 

Thus in a case in which X, by imitating the signature of 
My induced A B to supply him with goods under the belief 
that they were supplying Jf, it was held that no contract 
had ever arisen between A B and X. '^Of him," says 
Lord Cairns, ^ they knew nothing, and of him they never 
thought With him they never intended to deal* Their 
minds never even for an instant of time rested upon him, 
and as between him and them there was no consensus of 
mind which could lead to any agreement or contract what- 
ever. As between him and them there was merely the one 
side to a oontract, wherSj in order toprod%toe a contract^ two 
sides would he required.^^ ^ 

•.I..&7Ch.8L 

Ic OmSj ▼. UndMy, I App. Om. 4e>. 

1 GTeg<M7 T. Wendell, 40 Mich. 4i8. Cooley, J. : *' No man can be com- 
pelled against his will to accept another contracting partj in place of 



HI fX)RMATiON OF OONTRAOr. Fmr% tt 

[*198] *Li the case referred to, the mistake was induced 
by fraud, but the case of Bavlton v. J<ms8^ shows 
diat innocent mistake may^produce the same effects. There 
the plaintiff succeeded to the business of one Brocklehorst^ 
with whom the defendant had been accustomed to deaL 
The defendant sent an order for goods to Brocklehurst^ and 
the plaintiff supplied the goods without any notification of 
the changa It was held that he could not recover their 
price.* « T« order to entitle the plaintiff to recover he must 
show that there was a contract with himself." * 

And it will be remarked that this was not like a case of 
^m offer made by sending the goods and accepted by the 
use of them, else the defendant would have been liable for 
their price: but it was the acceptance by the plaintiff of a 
proposal addressed to Brocklehurst, so that the defendant 
had not the option of refusing an offer made by the plaint- 
iff, but was allowed by him to act upon an acceptance whioh 
he supposed to have proceeded from Brocklehurst. It may 
therefore be laid down that where X, without any fraud- 
ulent intention, substitutes himself for M so that A con- 
tracts with X under the belief that he is contracting with 
Mj the contract is void. If the Mistake be induced by the 
fraud of X, certain consequences flow from it^ other thap 

h. Far Clumnrtl, R 

tke ono he has dealt with, even thoagh a contract with such other party 
may be equally valuable, and in its results exactly the same." See Win- 
chester ▼. Howard, 97 Mass. 804; Holts ▼. Schmidt, 69 N. T. 268; Hamet 
▼. Letcher, 87 Ohio St. 866. 

1 The case of Boulton t. Jones is loUowed in Boston IceOompany t. 
Potter, 128 Mass. 2a A^ who had bought ice of B, ceased to take it on 
account of dissatisfaction with B, and contracted for ice with C Sub- 
sequently B boiiight C*s business and delivered ice to ^ without notify* 
ing him of his purchase until after the deUvery and consumption of the 
ice. Held, that there was no priyity of contract established between 
the plaintiflf and defendant; and that without such priyi^, the pes- 
session and use of the property would not support an implied amwwf>- 
sii; and that B could not maintain an action for the price of the \m 
HESinstX See Stoddard y. Ham, 129 Maaa 881 



Si. MISTAKE. 169 

Ja*^"^,-^*^ '^Drdinary cases of fraud, and these shall be noticed 



as to the subject-matt&r of the eontracL 

^ '^ ^le as to snbjeet-matter. — If a man can show that, 
^itu ^^ t any fault of his own, he has entered into a contract 
oi f ^-^^iire wholly different to anything that he intended, 
ii ^ ^^^^r^t, difficult to see that the element of consent is en- 
^\t^j ^^^" anting in such a transaction. If, while intending to 
o^^/^-^^ti with Ay he has been subjected to a substitution of 
% -^ as the party with whom the contract is made, it is 
^^ y^^^^T that there has been no community of in- 
teutic^Xi between him and X. But if a man *know8 [♦127] 
tb® 'Mature of the transaction and the party with 
^\v^iix he is entering into legal relations, it is, for the most 
part, his own fault if the subject-matter of the contract — 
the thing contracted for and the terms of the bargain — is 
not what he supposed. 

''If, whatever a man's real intention may be, he so con- 
ducts himself that a reasonable man would believe that he 
was assenting to the terms proposed by the other party, and 
that other party upon that belief enters into the contract 
with him, the man thus conducting himself would be equally 
bound as if he had intended to agree to the other party's 
terms." • 

Why generally inoperative. — And so if the parties are 
agreed in clear terms and one of them does not get what 
he anticipates under the contract, this is, if anything, fail- 
ure of Performance and not Mistake. It may be that the 
promisor offered more than he could perform under a mis- 
taken impression as to his powers, his judgment or his 
rights. If he did so he is liable for his default. 

For every one who enters into a contract must be pre- 
sumed to believe that he can perform it, and that it is his 
interest to do so, and in like manner that the other party 
can and will perform it If this belief is erroneous, thv 

& B« Btaektan, J., to Sntth ▼. Hi«hM, L. B. • Q. B. at ». 607. 



m rOBMATlON OF OONTRACrr. Ftftn. 

error will not avoid the contract, though non-performance 
on one side may relieve the other from his liabilities under 
the contract, and must entail payment of damages. 

The question is not what the parties thougkty but what 
they said and did. A sells to X^ and X believes that he is 
buying this bar of gold — this case of champagne — this 
barrel of oysters. The bar turns out to be brass, the case 
to contain sherry, the barrel to contain oatmeal. The par- 
ties are honestly mistaken as to the subject-matter of the 
contract, but their mistake has nothing to do with ^heir 
respective rights. These depend on the answer to the ques- 
tion. Did A sell to JT a bar of metal or a bar of gold t a 
case of wine or a case of champagne? a barrel of 
[*128] provisions or a barrel of *oysters ? A contract for 
a bar of gold is not performed by the delivery of a 
bar of brass. A contract for a bar of metal leaves each 
party to take his chance as to the quality of the thing con- 
tracted to be sold, but this again would not be performed 
by the delivery of a bar of wood painted to look like metal 

The cases' cited in illustration of the rule that a man is 
not bound to accept a thing substantially different from that 
which he bargained for, have nothing to do with the For- 
mation of Contract; and we must keep these questions of 
Mistake and Failure of consideration clearly apart. For 
Mistake prevents — what Failure of consideration implies — 
the existence of a contract. 

It is hard enough, as we shall find hereafter, to determine 
whether Failure of consideration, that is, failure to perform 
the terms of a contract, is total or partial, and what are 
the rights of the parties injured by such a failure. The 
difficulty becomes intolerable, if, besides inquiring how far 
the performance falls short of the promise, we analyse the 
mental process by which an honest promisor came to make 
to an honest promisee a promise which he did not keep. 

Mistake as to the subject-matter of a contract will only 
avoid it in three cases. 

▼. BarttottiSE. A B. 840; CondarT. Hall, ta B. N.a a 



Chap. IV. 8 1 MISTAKE. l(n 

(a) The parties may be agreed but the subject-matter of 
their agreiement unknown to them may have ceased to exist. 

(jk) The parties may have agreed in terms but A may be 
thinking of if as the subject-matter while X is thinking 
of m. 

{o) One of the parties may knowingly allow the other to 
contract under a misapprehension as to the extent of his 
promise. 

(a) Mistake ob to the existence of the suhfect^matter 
of a contract. 

May amount to antecedent Impossibility. — If A agrees 
with X in respect of a thing which, unknown to both 
parties, is non-existent at the time of entering into 
*the contract, the mistake goes to the root of the [*129] 
matter and avoids the contract. Such mistake is in 
fact a phase of the subject of impossibility of performance. 
But, inasmuch as the thing agreed upon has ceased to be 
possible before the agreement was made, such impossibility 
prevents a contract from ever having arisen and does not 
operate, as impossibility arising subseqre it to the contract 
will sometimes operate, as a form of discliarge. One of the 
leading cases on this subject is Couturier v. Ilastie^^ arising 
out of the sale of a cargo of corn which was supposed by 
the parties to be, at the date of sale, on its voyage from 
Salonica to England, but which had in fact, prior to the 
date of sale, become so heated on the voyage that it had to 
be unloaded and sold. It was held that the contract was 
void, inasmuch as it ^* plainly imports that there was some- 
thing which was to be sold at the time of the contract and 
something to be purchased," whereas the object of the sale 
had ceased to exist^ 
•.sBLL-aon. 

1 There \b no contract where there turns oat to be no subject-matter. 
Qibeon t. PeUde, 87 Biich. 880, foUowing Couturier y. Hastie; AUen y. 
Uacnmoiid^ U Pet. 88; SilTemaU ▼. Cole, 13 Barb. 686: Thompson t. 



il8 . FORMATION OF CONTRACT. FtowQ 

So too in Strickland v. Turner^* the plaintiff pnrohased 
an annuity whioh at the time of purchase had already failed 
owing to the death of the annuitant. It was held that he 
eould reoover the price which he had paid for the annuity. 

Mistake as to existence of a right is not ^^ ignorance of 
law/* — In cases where the non-existence of a right is con- 
cerned, it may be suggested that mistake of this nature is 
mistake of law, and that to allow a man to avoid a contract 
on the ground that he mistook his right is an infringement 
of the rule ignorarUia juris haud excusat. But a distinction 
is drawn by Lord Westbury in Cooper v. Philbs^* which was 
a case of mistaken rights, between two senses in which the 
word jtis is used with reference to that rule. ^ It is said 
ignorarUia juris haud excusat; but in that maxim the word 
jiAs is used in the sense of denoting general law, the ordi- 
nary law of the country. But when the word jus is used in 
the sense of denoting a private right, that maxim has no 
application. Private right of ownership is a matter of fact ; 
it may be the result also of matter of law; but if parties 
contract under a mutual mistake and misapprehen- 
[*180] sion as to *their relative and respective rights, the 
result is that that agreement is liable to be set aside 
as having proceeded upon a common mistake." 

(jk) Mistake as to the identity qfthe subject-matter qf a 
contract. 

Mistake of identity. — An agreement may be void where 
A agrees with X concerning My thinking that X is refer- 
ring to My while X agrees with A concerning mand thinks 
that A refers to t/k 

Under such circumstances there is a mistake in the iden- 
tity of the thing contracted for; the minds of the parties 

•.TBsclLnT. 
kL.&SH.L.17Q. 

QuUd. 20 Pick. 184; King v. DooUttle, 88 Tenn. 77; Brick 06. t. Fond 
88 Ohio St 66. 



IV. St inCTAKE. 100 

neTW really meet, and there is no trne consent. Thns where 
A agreed to buy of X a cargo of cotton* ^^to arrive ex 
Peerless from Bombay," and there were two ships of that 
name, and the bnyer meant one and the seller the other, it 
was held that there was no contract, and that the buyer 
was not bound to accept a cargo which, though it came ^' ex 
Peerless from Bombay," did not come in the vessel of that 
name which was present to his mind when he made the 
agreement 

Distinct ftom mere eonf aslon or misnomer. — It is clear 
that if the buyer had meant a ship of a different name he 
would be bound by the terms of his contract; for unless the 
description of the subject-matter of the contract admits of 
more meanings than one, the party setting up mistake can 
only do so by showing that he meant something other than 
that which he said; and this, as we have seen, he may not 
do. On the other hand, the case of lonides v. The Pacifio 
Insurance Cofnpany^ shows that a mere misnomer of the 
subject of the contract will not entitle either party to avoid 
it if the contract itself contains such a description of its 
fubject-matter as practically identifies it.^ 

(e) Mistake aetoihe nature of the promise known to the party 
to whom the promise is made. 

Mistake as to quality of thing promised. — This is the 
only form in which mistake as to the quality or quan- 
tity of the thing promised can affect the validity of *a [*131] 
contract We must exclude from our consideration 
cases * in which the offer and acceptance never agreed in 
terms, and so there was never the outward form of agree- 
ment; and cases in which the meaning of the terms is dis- 
puted and the Courts must settle whether the contract has, 
upon its true construction, been performed or broken. 



I ▼. WlebeUiMM, 1 H. A a 901 

kL.&eQ.a68o. 

& Ikomton T. Kempiter, 6 Tumi 781 



iHftiard T. N. Eii|^ Marine Ini. Oo^ 1 Sumner, 218. 



110 FOBHATIOM OF COin^RACr. FutIL 

Nor need we consider oases in which a promisee is unable 
to obtain specific performance of a promise off ered in terms 
which are the result of a manifest inadvertence, and the 
parties are left to their legal rights and remedies. Where A 
offered to sell an estate to JT, but by a mistake in adding up 
the prices of the various plots offered it for £1,000 less than 
he meant, the Court would not enforce the contract* But 
it does not follow from this that the plaintiff could not have 
recovered by action such damages as he might have sus- 
tained. 

The quantity of an article bought, or the price to be paid 
for it, are points not usually misstated by contractmg parti^ 
but their statements must be taken to be conclusive against 
themselves. The quality of the article is a matter which 
the parties must look to for themselves: they cannot ask 
courts of law to correct their errors of judgment. 

Besponsibilities of buyer as to quality.— That an article 
should come up to a certain standard of quality must be the 
subject of express warranty. Where the buyer is nnable 
to inspect the thing purchased,* the law protects him by the 
introduction of implied warranties, which secure to him in 
substance that he shall obtain the kind of thing he bar- 
gained for, and that of a marketable quality; but anything 
more than this must be a question of terms.^ U the buyer 

<k Webster ▼. Oeefl, 80 BeaT. 88. 

». Jones T. Just, L.RSQ.B.Atp.906u 

1 The article must not only be the kind of thing bargained for and 
marketable as such, but also, when a person contracts to supply an article 
which he manufactures, or in which he deals, to be applied to apartica- 
lar purpose, and under such circumstances that the buyer necessarily 
trusts to the judgment or skill of the seller, there is in that case an im- 
plied warranty that the article is reasonably fit for the purpose to which 
it 18 to be applied. Hight ▼. Bacon, 136 Mass. 10; Downing ▼. Dear- 
bom, 77 Me. 457; Pease ▼. Sabin, 88 Vt 432; Poland v. Miller, d5 Ind. 
887; Snow v. Shomacker Manuf. Co. 69 Ala. Ill; Ulrich v. Storer, 12 
Phila. (Pa.) 199 ; Robinson Machine Works ▼. Chandlei-. 56 Ind. 575 ; How- 
ard ▼. Hoey. 23 Wend. 850; Van Wyck v. Allen. 69 N. Y. 61; ByersT. 
Ghapin, 28 Ohio St. 300; Merrill ▼. Nightingale, 39 Wis. 247; White ▼. 
Miller, 71 N. Y. 118. See infra, •SCO; Best ▼. Flint, 68 Vt. 548. 



Ch^ IV. § 1. MISTAKE. 171 

eaimot inspect the article before purchase, he must protect 
himself by the terms of his bargain ; if he can inspect it, he 
most exercise his judgment; and if he has no confidence 
in his own judgment, he may further seek to bind the seller 
by terms. A seller is not bound to depreciate his wares 
even though he knows that the buyer is forming an undue 
estimate of their quality. 

And as to quality promised. — *1^ot is the seller af- [*132] 
fected by such impressions as the buyer may form of 
the nature of his promise. If the buyer thinks he is being 
promised tLqutLlity of article which the seller does not intend 
to warrant, the contract will nevertheless hold. If the 
buyer wants to bind the seller to supply an article of a par- 
ticular quality he should make it a term of the contract 
Bat if the seller knows that the buyer understands his 
promise in a different sense from that in which he gives it, 
the case is altered. The contract is void because the ap- 
parent consent indicated by the agreement of the parties to 
oommon terms is shown to be unreal by the fact that one of 
the parties knew of the difference of intention between him- 
self and the other. 

Illustrations. — Let us illustrate these propositions by an 
imaginary sale. A sells X a piece of china. 

(a) X thinks it is Dresden china, A thinks it is not. Each 
takes the consequences. X may get a better thing than A 
intended to sell, or he may get a worse thing than he in- 
tended to buy, and in neither case is the validity of the con- 
tract affected. 

ifi) X thinks it is Dresden china. A knows that Xthinks 
BO, and knows that it is not. 

The contract holds. So long._as A, does nothing to d» 
wiveX, he is not bound to prevent Xtrom deceiving him- 
self ^ to the quality of the article sold. 

(j) X thinks that it is Dresden china and thinks that A 
intends to sell it as Dresden china; and A knows it is not 
Dresden china, but does not know that X thinks that he 
intends to sell it as Dresden china. The contract sajns noth- 



179 FORMATION OF OONTRACT. Tmxt II. 



ing of Dresden china, but is for a sale of china in 
terms. 

The contract holds. The misapprehension hj X qf the 
extent of A^8 promUe^ unknown to A^ has no effect. It is 
not J.'s fault, that X omitted to introduce terms wluoh he 
wished to form part of the contract 

(d) X thinks it is Dresden china, and think that A intends 
to sell it as Dresden china. A knows that X thinks 
[*133] he is *promising Dresden china, bat does not mean to 
promise more than china ia general terms. 

The contract is void, ^'s error jfaa. not one of jo dg- 
ment, as in (^), but regarded the intention of -4, and A, 
knowing that his intention was mistaken, allowed the mis- 
take to continue. 

The last instance given corresponds to the rule laid down 
in Smith v. Hughes,^ In that case the defendant was sued 
for refusing to accept some oats which he had agreed to buy 
of the plaintiff, on the ground that he had intended and 
agreed to buy old oats, and that those supplied were new. 
The jury were told that if the plaintiff knew that the de- 
fendant thought he was buying eld oatSy then he could not 
recover. But the Court of Queen's Bench held that this 
was not enough to avoid the sale; that in order to do so the 
plaintiff must have known that the defendant thought he foas 
being promised eld oats. It was not knowledge of the mis- 
apprehension of the quality of the oats, but knowledge of 
the misapprehension of the quality promised^ which would 
disentitle the plaintiff to recover. 

Mistake of buyer as to quality not known to seller.— 
In giving judgment in this case, Blackburn, J., says: — *^Id 
this case I agree that on the sale of a specific article, unless 
there be a warranty making it part of the bargain that 
it possesses some particular quality, the purchaser must 
take the article he has bought though it does not possess 
that quality.'' (This is instance a.) 



IV. S t MISTAKE. 179 

Hlstake of bn jer as to quality known to seller.— ^^ And 
I agree that even if the vendor was aware that the pur- 
chaser thought the article possessed that quality, and would 
act have entered into the contract unless he had so thought, 
still the purchaser is bound, unless the vendor was guilty of 
some fraud or deceit upon him, and that a mere abstinence 
from disabusing the purchaser of that impression is not 
frand or deceit; for whatever may be the case in a court of 
morals, there is no legal obligation on the vendor to inform 
the purchaser that he is under a mistake, not induced by 
the act of the vendor." (This is instance ^.) 

'Mistake of buyer as to quality promised not [*184] 
known to seller. — And Hannen, J., said, " It is essen- 
tial to the creation of a contract that both parties should 
agree to the same thing in the same sense. • • • But one of 
the parties to an apparent contract may, by his own fault, be 
precluded from setting up that he had entered into it in a 
different sense to that in which it was understood by the other 
party. Thus in a case of sale by sample where the vendor, 
by mistake, exhibited a wrong sample, it was held that the 
contract was not avoided by this error of the vendor."* 
Soatt V. ZitUedale* (This corresponds to instance f.) 

Mistake of buyer as to quality promised known to 
seller. — And further he says, " If, in the present case, the 
plaintiff knew that the defendant, in dealing with him for 
oats, did so on the assumption that the plaintiff was con- 
tracting to sell him old oats, he was aware that the defend- 
ant apprehended the contract in a different sense to that in 
which he meant it, and he is thereby deprived of the right 
to insist that the defendant shall be bound by that which 
was the apparent, and not the real bargain." (This cor- 
responds to instance d.) ^ 

k This CAM pals, finom tii* tdler*! point of view, the principle wldeh webn^B been 
Ibatomtins from the point of ilow of the buyer. The teller meanB to promiie one 
fUmgi he hi feot prom lew enother; the fiust that he thinks he ii promifllng ■omethtng 
iMi thAB ha doee promiee has no effect on the Talldlty of the eale. 

1 OiflW under the fourth (6) claas are usually treated under the Bub- 
jaok of fraud. Unleas the bujer was induced to beUeve, through the 



174 FORMATION OF CONTRACT. Ptert H 

Application of rule in eqnity. — In the case of Oarrard 
V. Frankd* the point insisted on in Smith v. Sugfufs arose 
in equity. The plaintiff and defendant signed a memo- 
randum of agreement by which the plaintiff promised to 
let certain premises to the defendant at the rent of £230, in 
aU respeote an the terms of the vnthin lease; and this memo- 
randum accompanied a draft of the lease referred to. The 
plaintiff, in filling in the blank in the draft for the amoont 
of rent to be paid, inadvertently entered the figures £130 
instead of £230; and the lease was engrossed and executed 
with this error. The Court was satisfied, upon the evidence, 
that the defendant was aware of the discrepancy between 

the rent which she was promising to pay and the rent 
[*136] which the plaintiff believed her to be promising *to 

pay; and she was given the option of retaining the 
lease, amended so as to express the real intention of the 
parties, or giving it up, paying at the rate of £230 per an- 
num for such use and occupation of the premises as she had 
enjoyed.* • 

The rule which these two cases establish comes in sub- 

a. 80BeftT.44^ 

conduct of the seUer, that a giTen quality was promiaed, the sale would 
be upheld. " The general rule both of law and equity, in reepeot to 
concealments, is that mere silence with regard to a material fact which 
there is no legal obligation to diyulge wiU not avoid a contract* al- 
though it operates to the injury of the party from whom it is con* 
oealed.*" Story on Gont. 616 ; People's Bank ▼. City of New York, 81 N. 
T. 108; Butler's Appeal, 26 Pa. St. 68; Loidlow ▼. Organ, 2 Wheat. 178; 
Hadley ▼. Clinton Importing Co. 18 Ohio St. 602. The slightest actiTe 
conduct, however, tending to mislead the buyer is evidence of fraud. 
Bigelow on Fraud, 82. The courts of Missouri and Mississippi have aii- 
nounced a rule at variance with the rule stated in the text. In those 
states it is a fraud for the seller not to communicate to the buyer the ex- 
istence of latent defects in the quality of the article sold, Knowing that 
the latter is acting on the supposition that no such defects exist. CecQ 
T. Spurger, 82 Mo. 462; Patterson v. Kirkland, 84 Miss. 428. 

' In the American, courts, the doctrine is well settled that when the 
parties have made a mistake in drafting their contract a court of equity 
will correct the writing in accordance with the manifest intention of tiia 
parties and decree specific performance of the agreement thus varied 
and corrected. 2 Pomeroy'sEq. Juzis. sec. 862. 



CbM^ IV. 8 1 MISREPRESENTATION. 178 

stance to this: that where there is mistake, not as to the 
subject-matter of the contract, but as to the terms of the 
contract, and one party ^^ being at the time cognizant of the 
fact of ike errcr^ seeks to take advantage of it," * the con- 
tract will be treated as void both in law and equity. There 
is in fact nothing but the absence of any positive represen- 
tation to distinguish such cases from Fraud. 

Effects of mistake. — The effect of Mistake, where it has 
any operation at aU, is to avoid the contract The Oommon 
Law therefore offers two remedies to a person who has en- 
tered into an agreement void on the ground of Mistake. If 
it be still executory he may repudiate it and successfully de- 
fend an action brought upon it; or if he have paid money 
ander the contract, he may recover it back upon the gen- 
eral principle that '' where money is paid to another under 
the influence of a mistake, that is, upon the supposition 
that a specific fact is true which would entitle the other to 
the money, but which fact is untrue, an action will lie 
to recover it back." • 

In equity the victim of mistake may resist specific per 
formance of the contract, and may sometimes do so success 
foUy when he might not have been able to defend at law 
an action for damages arising from its breach.' He may 
also as plaintiff apply to the Chancery Division of the High 
Court to get the contract declared void and to be freed 
from his liabilities in respect of It. 

*§3. Jtierepreeenta^ion. [n36] 

Misrepresentation not easy to distinguish f^om ft^aud.— 
The subject of misrepresentation is beset with various diffi- 
culties. One difficulty arises from the wide use of the term 
Fraud to cover misrepresentations of fact which vary very 
widely in their nature and consequences. 

m. r^Bonilljr, H. a. In GArrud t. Itukil, SO Bmt. 4BL 
kXtf|7T.SoUrl,9]LAW. oa 



170 FORMATION OF CONTRACT. FtetH. 

Or from condition.— Another difficulty arises from the 
desire of the Courts to exclude mere representations which 
do not form part of the terms of a contract from all efifect 
upon its validity. If a representation is to affect the 
formation or discharge of a contract it must either be made 
with a fraudulent motive, or it must occur in the case of 
certain special contracts, or it must be a term or integral 
part of the contract 

And this brings us to the third difficulty. If a re[H^ 
sentation forms an integral part of the contract it is virtu- 
ally placed on a level with a promise. If it turns out to be 
false its untruth does not affect the formation of the con- 
tract, but operates either to discharge the injured party 
from his liabilities or to give him a right of action as upon 
the failure of a promise. 

We have therefore to distinguish representation, whether 
innocent or fraudulent, which affects the validity of a con- 
tract, from representation which affects the performance of 
a contract. And the terminology of this part of the sub* 
ject is extraordinarily confused. Bepresentation, condition, 
warranty, independent agreement, implied warranty, wa^ 
ranty in the nature of a condition, are phrases which it is 
not easy to follow through the various shades of meaning 
in which they are used. 

It will perhaps clear the ground if we begin with three 
general statements which attempt to meet the three diffi- 
culties suggested. 

General rules. — (a) The practical test of fraud ks opposed 
to misrepresentation is that the first does, and the second does 
not, give rise to an action ex delicto. The first is a wrong, 
and may be treated as such, besides being a vitiat- 
[*137] ing element in contract. *The second may invali- 
date a contract but will not give rise to the action 
asB ddictOj the action of deceit^ 

1 It iB true that " an innocent misrepresentation bj mistake can nerer 
be made the ground of a personal action for frand," but il maj operate 
en the contract itself to sooh an extent that a coarl of eqai^ wm r»> 



lY. I a. HISREPREBENTATION. 177 

(b) Misrepresentation made prior to the formation of a 
contract) not constituting a term in the contract, will only 
affect its yalidity in certain special cases. These are con- 
traAts of marine or fire insurance, contracts for the sale of 
land, and contracts for the purchase of shares in companies.^ 

(c) Where representations made prior to the conclusion 
of a oontract have any effect, they affect the formation of 
the contract and make it voidable. Where statements 
which form part of the contract turn out to be false they 
affect the performance of the contract, and entitle the party 
misled either to hold himself discharged from it, or to bring 
an action for a breach of one of its terms. In the one 
case the contract has never been effectually formed, in the 
other it has been formed and broken. 

Let ns now consider these statements more in detail 

(1) How to distinguish misrepresentation ft^om fk*and. 

In the distinction which has been suggested between fraud 
and misrepresentation we describe them not by their nature 
but by their results. The procedure open to the injured 
party is made the test of the character of the act by which 
he is injured. But the character of a right is often indi- 
cated in the remedy which exists for the breach of it; and 
the exactitude of the pleadings now disused is sometimes 
a valuable aid to the ascertainment of the legal relations of 
the parties. 

Fraud is a wrong apart from contract, and damages aris- 
ing from it may be recovered in the action of deceit But 
fraud which gives the action of deceit need not involve 
dishonest motive where there is a knowledge that the state- 
ment made is false; nor if dishonest, or at any rate self- 
seeking motives are present is it necessary that there be 
dear knowledge that the statement made is false. 

loiiid the oontract ; but that wiU only be the caae when the error between 
the parties is of muh a naturt and eh4MraieUr oi to destroy the contmi 
neoi ia a ry to <fte validity of th4 oontraeL Brooka v. Hamflton, II 
IGnaSS. 
I8aai«0al61»iiolaa 
IS 



178 FORMATION OF CX)NTRACr. Pttt H 

Fraud without dishonest motiTO. — ^' It is fraud in law 
if a part J makes representations' which he knows to 
[*138] be false and injury ensues, although the motives *froin 
which the representation proceeded may not have 
been bad." Thus in PolhiU v. Walter ^^ the defendant ac- 
cepted a bill of exchange drawn on another person, he rep- 
resented himself to have authority from that other to 
accept the bill, and honestly believed that the acceptance 
would be sanctioned, and the bill paid by the person for 
whom he professed to act. The bill was dishonoured at 
maturity, and an indorsee, who had given value for the bill 
on the strength of the defendant's representation, brought 
against him an action of deceit. It was held that he was 
liable, and Lord Tenterden in giving judgment said: — *'If 
the defendant, when he wrote the acceptance, and, thereby, 
in substance, represented that he had authority from the 
drawee to make it, knew that he had no such authority 
(and upon the evidence there can be no doubt that he did), 
the representation was untrue to his knowledge, and we 
think that an action will lie against him by the plaintiff 
for the damage sustained in consequence." ^ 

It will be observed that in this case there was a repre- 
sentation of facts known to be false; that the knowledge of 

a. Per Tlndal, 0. J., Foster t. Ghariea, 7 Bing. lOOL 
». S a ft Ad. 114. 

1 Polhlll T. Walter.— Under the New York rule, in a case like PolhiO 
T. Walter, the injured party would have an action for deceit if the repre* 
•entation was fraudulent, otherwise he would have an action on con- 
tract for breach of warranty of authority or an action on the acceptance 
•gainst the party accepting without authority, White v. Madison, 26 
N. T. 124 ; but the majority of the decisions in this country do not favor 
the New York view. By acting as agent for another, when he is not, 
though he thinks he is, one tacitly and impliedly represents himself au- 
thorized without knowing the fact to be true ; it is in the nature of a false 
warranty, and he is liable. But his liability is founded on the ground 
of deceit, and the remedy is by action of tort. Jef ts ▼. York, 10 Cush. 
825; Bartlett ▼. Tucker, 104 Mass. 036; Johnson ▼. Smith, 21 Conn. 027; 
MoCurdy ▼. Rogers, 21 Wis. 127; Noyes ▼. Loring, 66 Me. 406; 1 Dan- 
Wfl, Neg. Inst 106. 



Ghaik IV. § 3. MlSRblPRESENTATION. 179 

the tintrath of the statement was the ground of the decis- 
ion : it is therefore clearly distinguishable from a class of 
cases in which it has been held, after some conflict of judi- 
cial opinion, that a false representation believed to be true 
by the party making it will not give rise to the action of 
deceit.* 

Beckless misstatement. — It is not necessary, however, 
to constitute fraud that there should be a clear knowledge 
that the statement made is false. Statements which are in- 
tended to be acted upon, if made recklessly and with no 
reajK>nable ground of belief, bring their maker within the 
remedies appropriate to fraud. 

Thus Lord Cairns lays it down as the settled rule of law 
that ''if persons take upon themselves to make assertions 
as to which they are ignorant whether they are true or un- 
true, they must in a civil point of view be held as respon- 
sible as if they had asserted that which they knew to be 
untrue." * 

And so neither the intent to defraud nor deliber- 
ate assertion ^of untruth are necessary elements in [*189] 
fraud. The nearest approach which we can make to a 
distinction between misrepresentation and fraud is that the 
former is an innocent misstatement or non-disclosure of 
facts^ while the latter consists in representations known to 
be false, or be made in such reckless ignorance of their truth 
or falsehood as to entitle the injured party to the action of 
deceit.^ 

(3) Innocent misstatement does not invalidate contract 
imless (1) the contract be of a special class.— In dealing 
with innocent misrepresentation and non-disclosure of fact, 
we may say generally that, unless they occur in the partio- 

«. Sm Banjunln on Salea, M8w 

k BMW BlTW MiBioK Co. T. Smith, Lb n 4 H. 11 01. 



1 A ■tatement of matters as ftustB, without knowledge of whether tfaay 
veroteiieorfiJ8e,iBeqaiTaleiit to a ksowioi^ false statsraeat, Walsh 



180 FORMATION OF CONTRACT. Put IL 

nlar kinds of contract already mentioned, they do not affect 
the validity of consent. The strong tendency of the courts 
has been to bring, if possible, every statement which, from 
its importance, coald affect consent, into the terms of the 
contract If a representation cannot be shown to have had 
so material a part in determining consent as to have formed, 
if not the basis of the contract, at any rate an integral paK 
of its terms, such a representation is set aside altogether. 

Contracts are often of a somewhat complex character, and 
consist of statements that certain things are, and promises 
that certain things shall be. 

Or (2) it amount to a condition.— If a representation is 
not part of a contract, its truth, except in the excepted cases 
and apart from fraud, is immaterial If it be part of a con- 
tract it receives the name of a Condition or a Warranty, its 
untruth does not affect the formation of the contract bnt 
operates to discharge the injured party from his obligation, 
or gives him a right of action, ex contractu^ for loss sustained 
by the untruth of a statement which is regarded in the light 
of a promise. We shall get a clearer notion of these various 
phases of representation from the case of Behn v. BumesaJ' 

The action was brought upon a charter party dated the 
19th day of Oct., 1860, in which it was agreed that the 
plaintiff's ship then in the port of Amsterdam should proceed 
to Newport and there load a cargo of coals which she 
[*140] ^should carry to Hong Eong. At the date of the 
contract the ship was not in the port of Amsterdam 
and did not arrive there until the 23rd. When she reached 
Newport the defendant refused to load a cargo and repudi- 
ated the contract, upon which action was brought The 
question for the Court was whether the words now in the 
part of Am,8terdam amounted to a condition the breach of 
which entitled the defendant to repudiate the contract^ or 
whether they only gave him a right, after carrying out the 
contract^ to sue for such damages as he had sustained.* 

k BtluiT.BiinMii.iaA&VT;ta*a«. 



Ckmp. IV. g a. MISREPRESENTATION. 181 

Williams, J., in ^ving judgment in the Exchequer ChambeTi 
thus distinguishes the various parts or terms of a contract : — 
Bepresentatlon made a term in contract. — '^ Properly 
■peaking, a representation is a statement or assertion, made 
by one party to the other, before or at the time of the con- 
tract, of some matter or circumstance relating to it. Though 
it is sometimes contained in the written instrument, it is not 
an integral part of the contract ; and, consequently, the con- 
tract is not broken though the representation proves to be 
nntvne; nor (with the exception of the case of policies of 
insurance, at all events, marine policies, which stand on a 
peculiar anomalous footing) is such untruth any cattse of 
action, nor has it any effica^ whatever unless the representor 
tion was made fraudulently^ either by reason of its being 
made with a knowledge of its untruth, or hy reason of its being 
made dishonestly^ with a reckless ignorance whether it was 
true or untrue. . . • Though representations are not 
usually contained in the written instrument of contract, yet 
they sometimes are. But it is plain that their insertion 
therein cannot alter their nature. A question however may 
arise whether a descriptive statement in the written instrur 
ment is a mere representation, or whether it is a substantive 
part of the contract. This is a question of construction 
which the Court and not the jury must determine. If the 
Court should come to the conclusion that such a statement 
by one party was intended to be a substantive part of 
his contract, and not a mere representation, the often-dis* 
cussed question may, of course, be raised, whether 
*this part of the contract is a condition precedent, or [^l*!] 
only an independent agreement, a breach of which 
will not justify a repudiation of the contract, but will only 
be a cause of action for a compensation in damages. 

^ In the construction of charter parties, this question has 
often been raised, with reference to stipulations that some 
future thing shall be done or shall happen, and has given 
rise to many nice distinctions. Thus a statement that a 
Teasel is to sail, or be ready to receive a cargo, on or before 



m FOBMATION OF OONTR^CT. Ftet H. 

a giyen day, has been held to be a condition, while a stiptk- 
lation that she shall sail with ail convenient speed, or within 
a reasonable time, has been held to be only an agreement** 

^ Bat with respect to statements in a contract descriptive 
of the sabject-matter of it, or of some material incident 
thereof, the true doctrine, established by principle as well 
as authority, appears to be, generally speaking, that if such 
descriptive statement was intended to be a substantive part 
of the contract, it is to be regarded as a warranty, that is to 
say, a condition on the failure or non-performance of which 
the other party may, if he is so minded, repudiate the con- 
tract in toto, and so be relieved from performing his part of 
it, provided it has not been partially executed in his favour. 
If, indeed, he has received the whole or any substantial part 
of the consideration for the promise on his part, the war- 
ranty loses the character of a condition, or, to speak per- 
haps more properly, ceases to be available as a condition, 
and becomes a warranty in the narrower sense of the word, 
viz. a stipulation by way of agreement, for the breach of 
which a compensation must be sought in damages." 

The Court ultimately held that the statement that the 
ship was in the port of Amsterdam at the time of making 
the contract was intended by the parties to be a Condition, 
and that the breach of it discharged the charterer from the 
obligation to perform what he had promised.^ 

The judgment in this case has been cited at some length, 
not only because it is the fullest judicial analysis of 
[*]42] the terms *of the contract, but also because it af- 
fords a good illustration of the provoking confusion 
oi the terminology of this part of the subject. 

Tarions senses of condition and warranty. — It will be 
observed that Condition is used in two senses, as meaning 

«. GlahohB ▼. Hayi, 1 IL ft 0.8B7;8eecer ▼. Datlito,tO. R N. a «; Twrmbodiia 
V. Hlckto, 1 H. ft N. 188. 

^The case of Behn ▼. Bumev is foUowed in Davison t. Von lin^n, 
118 U. a 60; Norrington v. Wright, 116 U. S. 203; Lawber t. Ban|pi, f 
Wan. 788. 



Ghapw IV. § Si IdSREPBESENTATION. 181 

a stetement that a thing is, and a promise that a thing shall 
be; in either case the statement or promise is of so impor- 
tant a nature that the untruth of the one, or the breach of 
the other, discharges the contract. 

Warranty also is used in several senses. It is first made 
a oonTertible term with a condition; it is then used ^4n the 
narrower sense of the word/' in which sense it means (1) a 
subsidiary promise in the Contract, the breach of which 
ooald under no circumstances do more than give rise to an 
action for damages, and (2) a Condition, the breach of 
which might have discharged the contract had it not been 
BO far acquiesced in as to lose its effect for that purpose^ 
thongh it may give rise to an action for damages. 

Yet in spite of this verbal confusion the judgment gives 
us a clear idea of the various terms in a contract. 

(a) Bepres&niaUana^ made at the time of entering into, the 
contract, but not forming a part of it, may affect its valid- 
ity in certain special cases, but are otherwise inoperative. 
When they do ^operatei, their falsehood vitiates the forma- 
tion otihQ contract and makes it voidable.* 
"ip) OmdUiana are either statements, or promises which 
form the basis of the contract Whether or not a term in 
the contract amounts to a Condition must be a question of 
construction, to be answered by ascertaining the intention 
of the parties from the wording of the contract and the cir- 
cumstances under which it was made. But when a term in 
the contract is ascertained to be a Condition, then, whether 
it be a statement or a promise, the untruth, or the breach 
of it will entitle the party to whom it is made to be dis- 
charged from his liabilities under the contract 

{]) Warranty ab Initio.— Warrantissj used in "the nar 
rower sense," are independent subsidiary promises, the 

i"To ooDstitate a representation there should be an afiBrmation or 
denial ci a tad^ or snch an aUegation as woold irresistibly lead the 
mind to the same oonolnsion." Storj, J., in livingBton ▼. Maryland 
Ins. Oo. 7 CnnsAif 606. For a oonsideration of the meanings of the terms, 
mprcooptstion, condition and warranty, see Protection Ins. Oo. v. Ha^ 
mer. S Ohio St 4S8; Schwaiabach t. Fko. Union^ 86 W. Va. MS. 



184 FORMATION OF CONTRACT. Fttt II 

• 

[*143] breach of which does not ^discharge the contract 
but gives to the injured party a right of action for 
Boch damage as he has sustained by the failure of the other 
to iulfiU his promise. 

{9) Warranty ex post facto. — A condition may be 
broken and the injured party may not avail himself of his 
right to be discharged, but continue to take benefit under 
the contract, or at any rate to act as though it were still in 
operation. In such a case the condition sinks to the level 
of a warranty, and the breacji of it, being waived as a dis- 
charge, can only give a right of action for the damage 
sustained.^ 

We have dwelt thus at length upon a subject which would 
seem to be more appropriately discussed under the head of 
Discharge of Contract, because it appeared necessary to 
point out the distinction between the llepresentation which 
in special cases affects the validity of a contract, and State- 
ments which are introduced into the terms of the contract 
as Conditions, the untruth of which o{K3ratos as a discharge. 
And it will be well before leaving this part of the discus- 
sion to illustrate by another case the desire of the Courts 
to include within the terms of the contract every statement 
of fact, which, apart from fraud, is in any way to affect it. 

> An illtistraiion of a warranty ex post facto is found In Avery r. 
Willaon, 81 N. Y. 341. The plaintiffs made an oral contract with the 
defendants, by which they agreed to sell to the defendants, at a price 
named, 699 boxes of glass, which were to be deliTered together at one 
and the same time. The seller dellTered a portion of the boxes and the 
buyer received them without any complaint whatever. The court held 
that while as a general rule, in that state, no action would Ue upon a 
special contract for the price agree<i u})on until performance of such 
contract, still, the buyer having received part of the boxes without giv- 
ing notice that he would not l)e boun«l unless the balance was furnished, 
had waived the condition that the wh(»le quantity should be delivered 
oefore he should become liable to pay for the part delivered, and that 
his remedy was by action for breach of the condition or by way of r^ 
eoapment in an action for the value of liie boxes received. What waa 
before a condition precedent had been converted by the act of tha 
parties into what tha author terms a warranty tx poit facto. 



caiapw ly. § a. misrepbesentation. las 

Bepresentation made anterior to contract: held a con- 
dition. — The case of Bcmnerman v. White • arose out of a 
sale of hops by the plaintiff to the defendant. Before com- 
mencing to deal for the hops the defendant asked the 
plaintiff if any sulphur had been used in the treatment of 
that year's growth of hops. The plaintiff said " no." The 
defendant said that he would not even ask the price if any 
sulphur had been used. After this the parties discussed the 
price and the defendant agreed to purchase the growth of 
that year. He afterwards repudiated the contract on the 
g^und that sulphur had been used in the treatment of the 
hops. The plaintiff sued for their price. It was proved 
that sulphur had been used by the plaintiff over five acres, 
the entire growth consisting of 300 acres. He had used it 
for the purpose of trying a new machine, had afterwards 
mixed the whole growth together, and had either 
forgotten the matter *or thought it unimportant. The [*144] 
jury found that the representation made by the plaint- 
iff as to the use of sulphur was not wilfully false, and they 
further found that '' the affirmation that no sulphur had 
been used was intended by the parties to be part of the con- 
tract of sale, and a warranty by the plaintiff." The Court 
had to consider the effect of this finding, and came to the 
conclusion that the representation of the plaintiff was a 
part of the contract and a preliminary condition, the breach 
of which entitled the defendant to be discharged from 
liability. 

Erie, 0. J.,* said, " "We avoid the term wcurranty because 
it is used in two senses, and the term condition because the 
question is whether that term is applicable, then, the effect 
is that the defendants required, and that the plaintiff gave 
his undertaking that no sulphur had been used. This un- 
dertaking was a preliminary stipulation; and, if it had not 
oeen given, the defendants would not have gone on with the 
creaty which resulted in the sale. In this sense it was the 

dOaRN. &844. 

Ik BttBOflnMa ▼. whiH !• a a a. a aa 



180 fobmahon of COlOILACr. Put tl 

condition upon which the defendants contracted; and it 
would be contrary to the intention expressed by this stipa- 
lation thi^t the contract should remain valid if sulphur had 
been used. 

^* The intention of the parties governs in the making and 
in the construction of all contracts. If the parties so in- 
tend, the sale may be absolute, with a warranty super- 
added; or the sale may be conditional, to be null if the 
warranty is broken. And, upon this statement of facts, we 
think that the intention appears that the contract should be 
null if sulphur had been used: and upon this ground we 
agree that the rule should be discharged." 

It is worth noticing with regard to these words -^Firstly, 
that the Chief Justice notes, though he does not altogether 
avoid, the confusion of terminology which has been already 
dwelt upon. Secondly, that the introduction of the repre> 
sentation into the contract as one of its conditions shows 
more markedly than the judgment in Behn v. Bumesa that 
statements which go to the validity of a contract are 
[*145] ^placed on a level with promises. For in the one 
case the statement was definitely introduced into the 
charter party, in the other it was made even before the par- 
ties commenced bargaining. 

Reason for limiting the effect of representations. — 
The determination of the Courts to exclude representations 
from affecting a contract unless they form a part of its 
terms, is an instance of the practical wisdom which marks 
the English Law of Contract. The process of coming to 
an agreement is generally surrounded by a fringe of state- 
ment and discussion, and the Courts might find their time 
occupied in endless questions of fact if it were permitted 
to a man to repudiate his contract, or bring an action for 
the breach of it, upon the strength of words used in con- 
versation preceding the agreement. When, therefore, the 
validity of a contract is called in question, or the liabilities 
of the parties said to be affected by reason of representa- 
tions made at the time of entering into the contract^ the 



IV, 8 a. MISREPRESENTATION. 1«7 

eflFeot of each representations may be said to depend on the 
answer that can be given to three questions — 1. Were the 
statements in question a part of the terms of the contract f 
9. If not, were they made fraudulently ? 8. If neither of 
these, was the contract, in respect of which they were made, 
one of those which we will call for convenience contracts 
ub^rrimae fiddt If all these questions are answered in the 
negative, the representation goes for nothing. 

Hot adbered to in the Eqnity Gonrts.— In the applicar 
tion of equitable remedies the Courts have sometimes been 
leas careful in limiting the effect of representations, and 
their decisions in this respect are not easy to reduce to any 
certain principle. 

(1) Befnsing specific performance.— Thus the untruth 
of a statement made by one of the parties to another has 
been held to constitute a good defence to a suit for specific 
performance of a contract, though, no fraud was alleged 
and though the statement was no term in the contract. A 
levee of wine-vaults received in the course of negotiations 
for a lease an assurance from the lessor that the vaults 
irere dry or should be made dry. The House of 
Lords ♦held that specific performance might be [*146] 
refused on failure of this representation, though 
Lord Oaims expressly said that it was ^^ not a guarantee," 
and that its failure would probably not be a cause of action 
in aCk>mmon Law Court.' 

(9) Setting aside contract. — So too it has been held to 
be ground for setting a contract aside that a representation 
believed to be true when made has turned out to be false; 
and this not on the ground that the contract was broken by 
failure of a vital condition, but that an attempt to enforce, 
or to resist the avoidance of a contract induced by state- 
ments which have turned out untrue, was a sort of ex post 
facU> Fraud. 
In TraM t^. Barvrigf a case of this nature the decision 



»T.Dizoii,L.&eH.L.«HL 
k4DLj. AatlS;aL.J.Gk.6tt. 



188 FORMATION OF CX)NTRAar. Flui IL 

might be explained as resting on the obsolete doctrine of 
" legal " or '* technical " as opposed to '' moral " Fraad But 
in a very late case, Jessel, M. U., was careful to state the 
attitude of eqaity towards representations of this sort, aa 
being such as is above described.* 

(8) Creating an estopi^el. — Again in Coverdale v. Eob^ 
ymod^tk promise to make a provision by will in consideration 
erf marriage was the subject of the suit, and Bacon, V. C^ 
while admitting that the transaction amounted to a con* 
tract, based his decision on ^^ this larger principle, that where 
a man makes a representation to another in consequence of 
which that other alters his position, or is induced to do any 
other act which is either permitted or sanctioned by ihe 
person making the representation, the latter cannot with- 
draw from the representation, but is bound by it condu* 
gively.^ 

Thus, in the case above cited, a lona fide representation, 
not a part of the contract, has been held (1) to be ground of 
defence to a suit on the contract: (2) to be ground for 
avoiding the contract: (3) to constitute some undefinable 
relation analogous to contract and of like effect, but based 
on '^ a larger principle." 

It is unfortunate that these decisions which might have 
been brought into perfect accord with the more exact rea- 
soning of the Common Law Courts should have 
[*147] been ^expressed in language calculated to create 
additional confusion in a subject already difflcuit 

For a fuller discussion of these cases the reader should 
refer to the interesting notu of Mr. Pollock (m this sub- 
Jeot.* 

«^ Radgim^B ▼. Hard, iO Ch. D. tfL 

lb 16 Eq. 1X1. 

A Poliock OB Oont p^ 608, ed. 4 



iThrall t. Thrall, 80 Wis. G08; Banget t. Monroe, 68 Mich. 668; Mon- 
dorf ▼. Howard, 4 Md. 469; Johnson t. HubbeU, 10 N« J. Ea^ 883; 
Wright T. Tin8lej,80 Ma 889. 



ChH>.IV. §a. MISREPBESENTATION. 18» 

(3) Effect of making misrepresentation a mode of dls- 
eharge. — One result of the introduction into the body of 
a contract of such statements as are allo\ired to be operative 
18 that their untruth, instead of being a vitiating element 
in the Formation of contract, becomes a form of Discharge. 
We have therefore to distinguish between Misrepresenta> 
tion which makes a contract voidable because entered into 
under such circumstances as preclude true consent, and a 
&ilare of a descriptive statement which amounts to a breach 
of contract, either dischargmg the injured party or giving 
him a right of action for damages sustained. 

The difference is not of any great practical importance, 
though it somewhat interferes with a systematic arrange- 
ment of the subject. In tUe one case the parties have never 
been completely bound to one another for want of genuine- 
ness of consent: in the other case there has been a vvrumlum 
juris in all respects complete; it has been broken, and one 
of the parties, if he so please, is discharged, and a new ob- 
ligation, a right of action, takes the place of the old one. 

In the case of such a Condition as that in Behn v. Bur* 
nes9j^ it would have seemed to accord more truly with the 
attitude of the parties if the defendant were allowed to say 
^you told me that your vessel was at Amsterdam; if I had 
not thought it was there I would not have contracted with 
yon : my consent was obtained by misrepresentation of ma- 
terial facts and so was unreal. I never really contracted 
at alL" But instead of this he is made to say, ^4n stating 
that your ship was at Amsterdam yon must be supposed 
to have promised me that if it was not there I should be 
discharged: it was not there and I am discharged." Aa 
regards the rights of the parties the difference is not very 
material, but it would have been simpler to attach the 
natural meaning to the words of men, and better 
*to have avoided the introduction of implied con- [*148] 
ditions and warranties which are apt to give an air 

a<&*anL 



190 FORMATION OF COlOILACr. Past H 

of unreality and artifice to the subjeot of the foifiUmeiit mud 
breach of contract. 

CorUrads qfected hy MUrepreimtatiofk 

Contracts uberiimae fldeL— It remains to consider the 
special contracts which are affected in their formation by 
misrepresentation or non-disclosure. These are contracts 
sometimes said to be uberrimas fdei^ and their character^ 
istic in this respect is that one of the parties must, from the 
nature of the contract, rely upon statements made by the 
other, and is placed at a disadvantage as regards his means 
of acquiring knowledge upon the subject. 

(a) Contracts of marine and fire insurance. 

Marine insurance. — In the contract of marine insurance ^ 
the insured is bound to give to the underwriter all such in- 
formation as would be likely to determine his judgment in 
accepting the risk; and misrepresentation or concealment 
of any such matter, though unaccompanied by fraudulent 
intention, avoids the policy. ^^ It is perfectly well estab^ 
lished that the law as to a contract of insurance differs 
from that as to other contracts, and that a concealment of 
a material fact, though made without any fraudulent inten- 
tion, vitiates the policy." ' So in the case here quoted, where 
goods were insured upon a voyage for an amount consid- 
erably in excess of their value, it was held that although 

«. pier BlAckbon, J., In lonides ▼. Pendtf, L. B. Q. B. U7. 

1 Marine Insnrance.— In McLanahan v. UniTenal Ina. Oc 1 PMen» 
170, the court said, speaking of marine insurance : " The oontrad of in* 
■urance is one of mutual good faith ; and the principles which goven 
it are those of enlightened moral policy. The underwriter must be pr^ 
earned to act upon the belief that the party procuring insurance ia not| 
at the time, in poasession of any fact material to the risk, which he does 
not disclose.*' Every fact is material which, if communicated to the 
underwriter, would have the effect to influence his actioii in dedin* 
ing or accepting the risk ; and concealment, which is only the effect of 
aoddent, negligence, inadvertence or mistake, will, if materialt aToid 
the policy. Union Ins. Co. r. Storey, Harp. (& C.) 286; Lexington Ins. 
Oo. V. Paver, 16 Ohio, 884; Vale v. PhoBoix Ins. Go. 1 Wash. S8iL 



au|ft.IV.§a. MISREPRESENTATION. m 

the fact of OTer-Yaluation would not affect the risks of the 
Toyage, yet, being a fact which underwriters were in the 
habit of taking into consideration, its concealment yitlated 
the policy. 

lire insurance. — In the contract of fire insurance* the 
description of the premises appears to form a representSr 
tion on the truth of which the validity of the contract de- 
pends. American authorities go further than this, and hold 
that the innocent non-disclosure of any material facts viti- 
ates the policy. In a case quoted by Blackburn, J., in the 
judgment above cited,* ^^ the plaintiffs had insured 
certain property against fire, and *the president of t*149] 
the company heard that the person insuring with 
them, or at least some one of the same name, had been so 
unlucky as to have had several fires, in each of which he 
was heavily insured. The plaintiffs reinsured with the de- 
fendants, but did not inform them of this. A fire did take 
place, the insured came upon the plaintiffs, who came upon 
the defendants. The judge directed the jury, that if this 
information given to the president of the plaintiff company 

a Hew York Bowery Fire Ins. Ca ▼. New York Fire Ine. Co. 17 Wend. CM. 

^Fire Insnranee.— At the present time applications for insuranoe are 
QsnaUy bj way of answers to written specific inqniries, and it is held, 
under sach an application, that innocent failure to oommunicate, or 
innocent nonrdiscHosure of facts about which the plainti£F w^ not asked, 
wiU not have the effect to avoid the policy of insurance. Washington 
Hills Manuf. Co. ▼. Weymouth Ins. Ck>. 185 Mass. 606; Commonwealth t. 
Hide & Leather Ins. Co. 112 Mass. 186; darkv. Manuf. Ins. Co. 8 How. 
849; Qreen t. Merchants* Ins, Ca 10 Pick. 402; Browning t. Home Int. 
Ca 71 N. Y. 64a 

The mle of good faith, required in marine insnranoe, that the as- 
sured is bound,' though no inquiry be made, to disclose every fact within 
his knowledge which is material to the risk, does not apply, to its full 
extent, to policies against fira A higher degree of good faith and 
greater diligence in disclosing matters affecting the risk is required in 
marine than in fire insurance. Burritt v. Saratoga Fire Ins. Co. 6 Hill, 
192; Protection Ins. Co. ▼. Harmer, 2 Ohio St. 468; Wood on Fire Ina. 
sea 196, n. 6. But a false representation of a material fact, howeret 
innocently made, aToids the policy. Axmonr t. Trana-Atlanftio Fin 
Ina.Ca90N.Y.46a 



M FORMATION OF CONTBACI. FUtftlL 

was intentionally kept back, it woold vitiate the policy of 
reinsurance. The jury found for the plaintiffs, but the 
Ck>urt, on appeal, directed a new trial on the ground that 
the concealment was of a material fact, and whether intea- 
tional or not, it vitiated the insurance." 

Distinction in the case of life insurance. — The contract 
of life insurance ^ differs from those of marine and fire in- 
surance in this respect.* Untruth in the representations 
made to the insurer as to the life insured will not affect the 
validity of the contract unless they be made fraudulently, 
or unless their truth be made an express condition of the 
contract. Thus in WTueUon v. Hardistyf an insurance office 
was held liable on a policy entered into on representations 

A Ibe iMignngB of JeMd, M. B., In London Anoranoe Co. ▼. Manael nems nt llm 
right to throw dottht on this distinction, but the facts disclose a statement Craudulent 
In itBeU, and made to the oflloe bj the partj' Insured, as against whom the poUsj was 
■et aside. 11 Oh. D. MS. 

h.8B.ftB.m. 

iLlfe Insurance.— Wheeltoii v. Hardlsty hae been foUowed in 
Schwarzbach ▼. Pro. Union, 25 W. Ya. 655. See Monlton t. Am. Life 
Ins. Go. Ill U. S. 835. In Blias on life Insurance, 75, it is insisted that 
the roles which goTem the doctrine of representation in fire insurance 
substantially apply to life insurance ; and that the case of Wheelton v. 
Hardisty is not in accordance with the correct English and American doc- 
trine, as pronounced by the courts and text-writers. In Vose ▼. Eagle Life 
& Health Ins. Co. 6 Cush. 43, the court say : " An untrue allegation of a 
material fact, or concealment of a material fact, will avoid the policy, 
though such allegation or concealment be the result of accident or n^- 
ligenoe or design." This Tiew is supported by the weight of authority in 
this country, so far at least as regards false representations. It is no 
reason to say that they were innocently made. If they were material 
to the risk and falsely made, they avoid the policy. Campbell v. New 
£ng. Ins. Co. )M) Mass. 896 ; Ooucher v. North West. Ins. Co. 20 Fed. Rep. 
696. A study of the cases will disclose the fact that there is practically 
very little distinction observed between the rules applicable to insur- 
ance, whether life, fire or marine. On appeal from the case of lind- 
man y. Desborough, 8 C. & P. 853, Bay ley, J., said: '* Whether a policy 
be effected on a life, or a ship, or against fire, the underwriter has a 
right to expect that everything material should be communicated to 
himu" This principle, if not announced, is at least often applied by the 
ooorts of this country in adjusting the rights of the parlies under a 
polipy of insuranoa. 



CbMp. TV.%2. MISREPRESENTATION. IM 

falsely and fraudulently made by a third party as to the 
health and habits of the person whose life was insured, 
which representations were made to the person insuring 
the life anl innocently supplied by him to the insurance 
oltitie. The Court of Exchequer Chamber expressly distin* 
guished the case from that of marine policies. ^^ There is 
nothing in law," said Willes, J.,^ "to make the truth of the 
statement a condition precedent to the Hability of the de- 
fendants upon the policy, unless it were untrue to the knowl- 
edge of the plaintiffs, and therefore fraudulent: the mere 
untruth of it would not avoid any policy in which it was 
introduced, the policy containing no express stipulation to 
that effect" 
*{p) Contracts for the sale of land. [*160] 

Sale of land. — In agreements of this nature a 
misdescription of the premises sold or of the terms to which 
they are subject, though made without any fraudulent inten« 
tion, will vitiate the contract. A single instance will illus- 
trate the operation, and the rationale of the rule. In Flight v. 
Booths leasehold property was agreed to be purchased by the 
defendant. The lease contained restrictions against the car- 
rying on of several trades, of which the particulars of sale 
mentioned only a few; and Tindal, C. J., in holding that 
the plaintiff could recover back money paid by way of de- 
posit on the purchase of the property, said, " "We think it 
is a safe rule to adopt, that where the misdescription, al- 
though not proceeding from fraud, is in a material and sub- 
stantial pointy so far affecting the subject-matter of the 
contract that it may reasonably be supposed that, but for 
such misdescription, the purchaser might never have entered 
into the contract at all: in such cases the contract is avoided 
altogether, and the purchaser is not bound to resort to the 
clause of compensation. Under such a state of facts, the 
purchaser may be considered as not having purchased 
the thing which was really the subject of the sale; as in 

It 



196 iFORMAHON OF CX)NTRACT. Ptet U 

take shares." These dicta are quoted with approval by liOrd 
Chelmsford in The Venezicela Railway Company v. Eiseh.^ 

In a later ease Lord Cairns points oat the distinoti n be- 
tween Fraud and sach non-fraudalent Misrepresentation as 
makes a contract of this nature voidable. He intimates that 
mere non-disclosure can never amount to fraud unless accom- 
panied with such substantial representations as give a false 
air to facts, but that " it might be ground in a proper pro- 
ceeding and at a proper time for setting aside an allotment 
or purchase of shares,^^ * 

We should distinguish this right of avoidance for non- 
disclosure, not only from the remedy in deceit for actual 
fraud, but from the remedy in tort given by the Companies 
Act* against directors for non-disclosure of contracts made 
a company or its promoters, and open to persons ' who take 
shares on the faith of a prospectus in which such contracts 
are not set out or referred to.^ 

Contract of suretyship is not uberrimae fldM. — The 

contract of suretyship is sometimes treated as being one of 
this particular class of contracts; but as regards the 

[*152] ^formation of the contract it is safe to say that this 
is not so. 

a. L.& 9H.L.atp.llS. 

». L.&8H.L.408. In PMk ▼. OunMif . 

& 80 ft 81 Vict c 181, i 38. 

d. 8ulliyaiiT.Mi(calfe,5 0.P.D.(a A.)45B. 

1 Contracts uberrimae fldeL— 8ome farther suggeBtions maj be made 
regarding this class of contracts: 

1. The business of marine insurance began early in the history of the 
law, and gave rise to the adoption of certain rules peculiar to the busi- 
ness, among which was the requirement that in his application for insur- 
ance the utmost good faith was required of the assured in aU matters 
pertaining to the risk. Fire and life insurance came later and took oo 
many of the rules of marine insurance, so much so that under the dcv 
eisions of many of the English and American courts, all insurance oon- 
tracts may fairly be classed as %iberrimas fldei. London Assurance t. 
Mansel, 41 Law Times, 225. 

S. The utmost good faith is exacted wh^i e the contracting parties sua- 
lain oonfldentiai relationa. Thm man •»'»»»^« ^•g>«r>|q^ ^^ ^^ ^^^^ 



Chap. IV. § 3. lOSREPBESENTATION. 197 

In its Inception. — It has been explicitly laid down in 
more than one case that the rales applicable to marine in- 
snrance do not apply to the contract entered into between 
the creditor and the surety of the debtor.* Non-disclosure 
or misrepresentation by the former must amount to fraud 
in order to invalidate the contract, though it would appear 
from the decision in Lee v. Joneef that in contracts of this 
nature very slight evidence is regarded as material upon 
which a jury may found an inference of fraud. 

Becomes so when once made. — But once the contract of 
suretyship has been entered into, the surety is entitled to be 
informed of any agreement which alters the relations of 
creditor and debtor, or any circumstance which might give 
him a right to avoid the contract. So in PhiUipe v. Fox- 
M^ the defendant had guaranteed the honesty of a servant 
in the employ of the plaintiff; the servant was guilty of dis- 
honesty in the course of his service, but the plaintiff con- 

c N. British Ins. Oo. ▼. Uoyd, 10 Bz. Ses ; Hamilton ▼. WatMn, IS Gk A F. 10ft. 
ft. 17C.B. N. & atp.60a. 
CLL.B.7Q. 3.660. 

iions existing between attorney and client, guardian and ward, parent 
and child, trustee and cestui que trust, Bigelow in his work on Frauds, 
chapter on Concealment, gives many others. It is often stated as a gen- 
eral principle that in all contracts between parties who do not stand on 
equal grounds, by reason of the existence of some confidential relation^ 
cnr by reason of the fact that one of the parties is laboring under some 
mental infirmity, it must appear that the confidence reposed has not 
been misused, and that the stronger has dealt fairly by the weaker. A 
prominent author has divided contracts uberrimae fldei into three 
classes: Ist. Cases in which, independent of the nature and object of 
the contract, there is a previous and existing fiduciary relation between 
the parties, from which the obligation of perfect good faith arises. Ex." 
amples of such cases are given above. 2d. Cases where no such fidu- 
ciary relation exists, but in which one of the parties has en^nressly 
reposed trust and confidence in the other, or the existence of such trust 
and confidence is necessarily implied from the acts of the parties. £2ach 
case depends on its own circumstances. 8d. Cases where there is no 
such relation or special confidence existing, but the very contract or 
transaction itself is intrinsicaUy fiduciary, without regard to the inten 
tion of the parties. Such are contracts of insurance. 2 Pomeroy's Eq. 
Juris, sec. 902. 



106 FORMATION OF CX)NTRACT. Pittt TL 

tinned to employ him and did not inform th^ defendant of 
what had occarred. Subsequently the servant comm.itt6d 
further acts of dishonesty, and the plaintiff came upon the 
defendant to make good the loss.* It was held that as the 
defendant would have an equitable right to revoke a guar- 
antee of this nature upon the first intelligence bf the serr- 
ant's dishonesty, the concealment from him of what had 
occurred released him from all liability for the subsequent 
loss. 

Expressions of opinion do not amount to representa- 
tion. — Even in contracts of the nature just described there 
is a limit to the effect of statements made with reference to 
the subject-matter of the contract. A mere expression of 
opinion will not amount to a representation the falsehood of 
which invalidfttes the contract. Thus in a contract of ma- 
rine insurance the insured communicated to the insurers a 
letter from the master of his vessel stating that in his opin- 
ion the anchorage of the place to which the vessel 
[*153] was bound was *safe and good. The vessel was lost 
there : but the Court held that the insured, in reading 
he master's letter to the insurers, communicated to them 
dU that he himself knew of the voyage, and that the expreci- 
sions contained in the letter were not a representation of 
fact, but an opinion which the insurers could act upon or 
not as they pleased.* 

Nor do commendatory expressions. — In like manner 
commendatory expressions, such as men habitually use in 
order to induce others to enter into a bargain, are not dealt 
with as serious representations of fact. A certain latitude 
is allowed to a man who wants to gain a purchaser, though 
it must be admitted that the border line of permissible 
assertion is not always discernible. Thus at a sale by auc- 
tion a statement that land was '' very fertile and improv- 
able," whereas in fact it was in part abandoned as useless, 
was held not to amount to a representation or misdescription 

•k Buri^eis ▼. Eto, 18 Eq. 457. 

k ▲BdanoBT.FMlfloIiia. Go. L. & 7 a P. as. 



IV. 8 8. FRAUD. 190 

■ach as would invalidate a sale of land,* it was said to be 
"a mere flourishing description by an auctioneer." But 
where in the sale of an hotel it was stated that the present 
oooupier was '' a most desirable tenant " when in fact his 
rent had for some time been obtained with difficulty and 
was much in arrear, and he went into liquidation directly 
after the sale/ such a statement was held to entitle the pur- 
ehaaer to rescind. 

§ 8. Fraud. 

In dealing with the subject of Fraud, we must endeavour 
to confine ourselves to a few very simple and general rules, 
lest we should be led into a discussion beyond the scope of 
this treatise, and perhaps of ethical rather than legal signifl- 
cance< It is idle to attempt to frame a defiqition of Fraud 
which should cover every aspect of so multiform a concep- 
tion; nevertheless we may put together in a set of words 
what may be considered to be the essential characteristics 
of Fraud such as will give rise to the action of deceit. 

Its essential features. — Fraud is a false representation 
of fact, made with a knowledge of its falsehood, or 
in reckless disregard whether *it be true or false, [*164] 
with the intention that it should be acted upon by 
the complaining party, ^nd actually inducing him to act 
Qpon it. 

Let us consider these characteristics in detail. 

Fraud is a false representation. 

There must be a representation, false in itself.— It dif- 
fers in this respect from ruynrdiscCosure such as may vitiate a 
DUtract vherrimdefdei; there must be some active attempt 
D deceive either by a statement which is false, or by a rep- 
esentation, true so far as it goes, but accompanied with 
ch a suppression of facts as makes it convey a misleading 
fanpression. Concealment of this kind is sometimes called 
'^active^" aggressive," or ^industrious;" but perhaps the 

▼. HaUett, L. B. 2 Ch. at p. S7. 
LmiA Md Hmm FTOpertj Cow » Gh. n. 1 



^^ FORMATION OF CONTRACT, Part DL 

word itself 9 as opposed to non-disclosure, suggests the active 
element of deceit which constitutes fraudulent misrepre- 
sentation. And the distinction between the misrepresenta- 
tion by non-disclosure, which has no legal consequences 
except in the case of contracts vberrimas fdei^ and the 
misrepresentation which would give rise to an action of de- 
ceit, is most clearly pointed oat by Lord Cairns in the case 
of Peek V. Chamey.* ^' Mere non-disclosure of material facts, 
however morally censurable, however that non-disclosure 
might be a ground in a proper proceeding at a proper time 
far setting aside an allotment or a purcliase of shares^ would, 
in my opinion, form no ground for an action in the nature 
of an action for misrepresentation. There must, in my 
opinion, be some active misstatement of fact, or, at all 
events, such a partial and fragmentary statement of fact, aa 
iha^ the withholding of thai which is not staged makes tliat 
which is stated absolutely falseP 

Non-disclosare is not fraud. — Disclosure then is not in 
the case of ordinary contracts incumbent on the parties. A 
vendor is under no liability to communicate the existence 
even of latent defects in his wares unless by act or implica- 
tion he represents such defects not to exist. In the case of 
Ward 1). Hdbhs^ the defendant sent to a public mar- 
[*155] ket pigs which were to his knowledge *suffering 
from a contagious disease, and his sending them to 
the market was a breach of 32 & 33 Vict. c. 78, § 57. The 
plaintiff bought the pigs, no representation being made as 
to their condition. The greater number died: other pigs 
belonging to the plaintiff were also infected, and so were 
the stubble-fields in which they were turned out to run. It 
was urged that the exposure of the pigs in the market 
amounted to a representation, under the circumstances, that 
they were free of any contagious disease. Cotton, L. J., 
in bis judgment said, '^ What is relied upon here as a repre- 
sentation is this: that the defendant, knowing the pigs had 

•.L.R.8H.L.atp.40a. 

k IQ. B. D. (G. A.) 160;4JLpp. Oft. 14 



Oiap. IV. § 8. FRAUD. 201 

an infeotions disease, sent them to market. Is that evidence 
on which a jury could find, properly, that defendant repre- 
sented that the pigs had not, to his Jtnowledge, any infec- 
tious disease?" And the Court held, overruling the judg- 
ment of the Court of Queen's Bench, that it was not.' 

So too in the case of Reates v. Lord Cadogan^ where the 
plaintiiOr sued for damages arising from the defendant's 
fraud in letting to the plaintiff a house ^ which he knew to 
be required for immediate occupation, without disclosing 
that it was in a ruinous condition, it was held that no such 
action would lie. 

"It is not pretended," said Jervis, C. J., "that there was 
any warranty, expressed or implied, that the house was fit 
for immediate occupation : but, it is said, that, because the 
defendant knew that the plaintiff wanted it for immediate 
occupation, and knew that it was in an unfit and danger- 
ous state, and did not disclose that fact to the plamtiff, an 

d. 10 a B. 501. 

h. The house waa leased for a term of years. The law Is otherwise where a for- 
■tafaed house is hired for a short period, as for Instance the London season. In such a 
ease immediate occupation is of the essence of the contract, and if the house is unln- 
hahitable the lessee is discharged, not on the ground of fraud, but because **he la 
offered something substantially different from that which was contracted for." Wil- 
son T. Finch-Hatton, 2 Ex. D. 530. 

This undertaldng as to sanitary condition Is extended by the Housing of the Wortc- 
lug Classes Act to small tenements of a specified Talue. 48 and 49 Vict o. 72, s. 18L 

1 Ward T. Hobbs.— It is to be said with regard to the case of Ward 
▼. Hobbs that the sale was " with all faults.** The vendor expressly 
refused to give any warranty, and when the case came before the House 
of Lords, 4 App. Ca. 14, the Lord Chancellor based his opinion on the 
fact that under the terms of the sale the pigs were sold "with aU 
faults,** and declined to express an opinion on what would have been 
the effect of ofFerinj^ the pigs for sale in open market, independent of 
such conditions. In Dixiger v. Nicholfl, 28 L. T. 445, Blackburn, J., said, 
" I entertain no doubt, but it is not necessary to decide the point, that the 
defendant, by taking the cow to a public market to be sold, though he 
dees not warrant her to be sound, yet thereby furnishes evidence of a 
representation that, so far as his knowledge goes, the animal is not sof- 
faring from any infectious disease. To say otherwise would be to run 
counter to the common sense of mankind.** It is believed that when a 
person sells an animal, knowing that it has a contagious diDoasOy and 
does not communicate that fact to the buyer, he is guilty of » frand and 



903 FOBHATIOM OF CX>MT&A.CIL Fttt U 

action of deceit will lia The declaration doei not allege 
that the defendant made any misrepresentation, or 
[*166] that he had reason *to suppose that the plaintiff 
would not do, what any man in his senses wonld 
do, viz. make proper investigation, and satisfy himself as 
to the condition of the house before he entered upon the 
occupation of it There is nothing amounting to deceit" 

The representation must be a representation offacU 

Expression of opinion. — It is hardly necessary to re- 
peat what was said on the subject of misrepresentation, 
that a mere expression of opinion, which turns out to be 
unfounded, will not invalidate a contract; but a good illus- 
tration of the contrast between opinion and representation 
may be found in the difference between the vendor of 
property saying that it is worth so much, and his saying 
that he gave so much for it^ The first is an opinion which 

would be liable in an action on the case. Jeffrey v. Bigelow, 18 Wen<L518; 
Minor v. Sharon. 113 Haas. 477 ; Ooolej on Torta, 481 ; Paddook t. Stro- 
bridge, S9 Vt 470. dmtra, HiU v. Balls, 9 H. & N. 209. As to meanlDg 
of expreoBion ''with aU faulta/* see Whitney t. Boardman, 118 Mass. 

S4a 

Keates v. Lord Gsdofsn has been generall j f oUowed in this ooontiy 
to the extent of holding that there is no implied warranty that the 
premises leased are fit for habitation; jet if a landlord lets premises, 
subject to a noisanoe prejudicial to life or health, it is his duty to in- 
lonn the tenant of the existence of the nuisance, and if he fails to do so, 
an action on the case may be maintained against him* Oaesar v. 
KamtB, 60 N. Y. 229; WaUace t. Lent, 1 Dalj, 481 ; Minor t. Sharon, 112 
Mast. 477; Lucas v. Oaulter, 104 Ind. 81; Fisher v. Lighthall, 4 Mackey 
(D. a), 82; S. C. 54 Am. Rep. 258. 

1 A representation bj the seller that the propertj offered for sale is 
worth a given sum \b a mere expression of opinion and not the rcpre> 
sentation of a fact, Noetting v. Wright, 72 111. 890; Davis t. Meeker, 6 
Johns. 854; Gordon t. Butler, 105 U. S. 658; Cagnej ▼. Cuson, 77 Ind. 
494; Ellis ▼. Andrews, 56 N. Y. 88; Furman t. Titus, 40 N. Y. (Superior 
Ct.) 284; and the same has been said as to statements as to the cost of 
the property, Medbury t. Watson, 6 Met 246; Cooper ▼. Levering, 106 
Mast. 79; Bishop t. Small, 63 Me. 12; Bowen t. Daris, 76 Me. 238; 
Eiohardson t. NoUe, 77 Me. 890; Tuck t. Downing, 76 lU. 91; bat it if 



•AHk IV. S t. FRAUD. M 

(he Imyer may adopt if he wiU: the second is an assertion 
of fact which, if false to the knowledge of the seller, is 
also frandalent* 

Expression of intention.— Again, an expression of in- 
tention does not amount to a statement of fact, nor does a 
promise; and we must distinguish a representation that a 
thing is, from a promise that a thing shall be.* 

Yet, though the intention expressed in a promise cannot 
usually be regarded as a statement of facts, we must note 
that there is a distinction between a promise which the 
promisor intends to perform, and one which the promisor 
intends to break. In the first case he represents truly 
enough his intention that something shall take place in the 
future: in the second case he misrepresents his existing in- 
tention; he not merely makes a promise which is ultimately 
broken, but when he makes it he represents his state of 
mind to be something other than it really is. And so it 
has been laid down that if a man buy goods, not intending 
to pay for them, he makes a fraudulent misrepresentation.*^ 

• HarvBf ▼. Ymag, 1 TalT. 10; Uadnj Petroleiim Oou t. Hmd, L. B. BP. a aftp. Ml 

6. niiinn*iOMMCh.D.60B. 

€L labpftrteWliltteksr.lO Ch.4ia 

held by some oourts that repreeentatiooB as to the ooet of an article maj 
be made under such drcumstancee as wiU justify the buyer in relying 
on them aa statements of facts. lyes v. Garter,, 24 Conn. 408 ; Somers t. 
Richards, 46 Verm. 170. See Weidner v. Philiipe, 89 Hun, 1 ; Markel t. 
Handy, 11 Neb. 218. Representations as to yalue may play an important 
part in determining a question of fraud. It has heea held thai if they 
be made by a person knowing them to be untrue and with an intention 
to deoeive the Tendee, and if the latter, relying on them, is misled to his 
injury, he may recover damages for his injury, and that it is for the jury 
to say whether the representations as to yalue were mere expressions of 
opinidi, or affirmations of facts to be relied on. Simar t. Oanaday, 68 
N. Y 288 Piokard t. McCk>rmick, 11 BCich. 69; Jackson t. Collins, 88 
Mieh. 657, Ghryster t. Ganaday. 90 N. Y. 272. 

> Donaldson v. Farwell, 93 U. S. 681 ; Stewart t. Emerson. 62 N. H. 
901; Jordan ▼. Osgood, 109 Mass. 457; Thompson v. Rose, 16 Conn. 71 ; 
Dow ▼. Sanborn, 8 Allen, 181 ; Cumahan t. Bailey, 28 Fed. Rep. 519; TaL 
oolt ▼. Henderson, 81 Ohio St. 162; Allen t. Hartfield, 76 lU. 868; 
Wrfgilil T. Brown, 67 N. Y. 1; AyersT. French, 41 Conn. 142; ftH<pi«tm 



8CM FXJRMATION OF CONTRACT. Part IL 

Again, it is said that misrepresentation of law does not 
give rise to the action of deceit, nor even make a contract 

voidable as against the person making the statement. 
[♦157] There *is little direct anthority upon the subject, but 

it may be submitted that the distinction drawn in 
Cooper V. Phiths * between ignorance of general rules of la w 
and ignorance of the existence of a right would apply to 
the case of a fraudulent misrepresentation of law, and that 
if a man's rights were concealed or misstated knowingly 
he might sue the person who made the statement, for de 
oeit. It would seem clear, from a strong expression of opin- 
ion to that effect in the Queen's Bench Division,^ that a 
fraudulent representation of the effect of a deed can be re- 
lied upon as a defense in an action upon the deed.^ 

The representation must be made \oUh hnawUdge qfitM 
fdUehood or in reckUas disregard qfUa truth. 

There mast be knowledge of falsehood. — Unless this i£ 
80, a representation which is false gives no right of actioa 
to the party injured by it. Thus where a Telegraph Com- 
«. L. & fl a L. im 

h. Hinchfleld ▼. London, Brighton and South Coast Railwaj Go. S Q. B. D. L 

T. Seymour, 40 Mich. 874. There are a few cases to the contrary. See 
Smith T. Smith, 21 Pa. St. S67; BeU t. EUis, 83 CaL 620; Wilson t. 
White, SO N. GL 280. That representations of intention do not amount 
to statements of facts, see Gage t. Lewis, 68 IlL 604 

^ There is abundance of authority in this country to the effect that 
misrepresentations of law or of the legal effect of a contract wiU not sa»> 
tain an action of deceit or justify a court in rescinding a contract, ex- 
cept where some relation of confidence and trust existed between the 
parties, or when one, by reason of his ignorance or unf amiliarity with 
business, was compelled to rely and did rely on the superior knowledge 
of the other, Upton ▼. Tribilcock, 91 U. S. 45; Wheaton v. Wheaton, t 
Conn. 96; Pinkham t. Qreer, 8 N. H. 168; Townsend t. Coles, 81 Ala. 
428; Clem ▼. Newcastel, etc. 9 Ind. 488; Fish ▼. Clelland, 88 DL 288; 
Grant t. Grant, 56 Me. 573; Moorland ▼. Atchison. 19 Tex. 803; Simms 
r. Ferrel, 45 Gh&. 585; but fraudulent representations as to the legal 
operation and effect of an instrument will be sufficient to avoid the 
same, when made to a party who is unable to judge of its true charartw 
and coDfltruction. Berry t. Whitney, 40 Mkah. 71. 



Caiapw IV. § 8. FRAUD. 900 

pany,* by a mistake in the transmission of a message, caused 
the plaintiff to ship to England large quantities of barley 
which were not required, and which, owing to a fall in the 
market, resulted in a heavy loss, it was held that the repre- 
sentation, not being false to the knowledge of the Company, 
gave no right of action to the plaintiff. "The general rule 
of law," said Bramwell, L. J., " is clear that no action is 
maintainable for a mere statement, although untrue, and 
although acted upon to the damage of the person to whom 
it is made, unless that statement is false to the knowledge 
of the person making it." And this rule is to be qualified, 
or rather supplemented, by the words of Lord Cairns in the 
Seese Biver Mining Company v. Smithy^ "that if persons 
take upon themselves to make assertions as to which they 
are ignorant, whether they are true or not, they must, in a 
civil point of view, be held as responsible as if they had as- 
serted that which they knew to be untrue." 

Or disregard of truth. — Therefore if a man makes a 
false representation in ignorance of its falsehood 
he is not liable as for fraud, unless in the *case of [^158] 
such recklessness of statement as would suggest 
mala jfides. 

The enunciation of the law on the subject by Bramwell, 
L J., is so clear and decisive that it is not necessary to go 
into a series of conflicting decisions between the years 1832 
and 1844, in some of which it was laid down that a false 
statement made in good faith amounted to "fraud in law." 
The term seems now to be finally condemned. It had a 
meaning so long as some judges were disposed to hold, as 
Lord Denman held in Evans v. CdllinB^ that the author of 
a misstatement which caused loss to the plaintiff, " though 
charged neither with fraud nor with negligence, must have 
heen guiUy of some favU when he made a false representa- 
tion." But since that decision was reversed by the Court 
of Exchequer Chamber,"* on the express ground that a state- 

«. Dickson ▼. Renter*! Tttlecraph Oo. 8 CL F. D. L 

». L.IL4H.L.ati».7B. 

A BQ.B.801 

A ftQ. &•»; udn^OrmrodT. Hirtk, U X. Jfc W. m 



206 FOSMAnOM OF OOVTBACL F^tft H 

ment made honestly and in a fall belief of its trath oonld 
afFord no cause for action, the term Ujal fra/ud has ceased 
to mean anything. The last word on the subject is said by 
Bramwell, L. J., in W&ir v. BM;^ he holds that to make a 
man liable for fraud, moral fraud must be proved against 
him, and adds, ^I do not understand legal fraud. To my 
mind it has no more m^ing than legal heat or legal cold^ 
legal light or legal shade. There never can be a well* 
founded complaint of legal fraud or of anything else except 
where some duty is shown and correlative right, and some 
violation of that duty and right. And when these exist it 
is much better that they should be stated and acted on, 
than that recourse should be had to a phrase illogical, and 
unmeaning, with the consequent uncertainty." 
It is now settled that a statement made with a lana fid4 

belief in its truth cannot be treated as fraudulent;* 
[*159] but the 'reckless assertions spoken of by Lord Cairns 

are on the border line, which it is hard to draw 
accurately between tru^th and falsehood. There may well 
be occasions in the course of business when a man is tempted 
to assert for his own ends that which he wishes to be true, 
which be does not know to be false, but which he strongly 
suspects to have no foundation in fact. Such statements 
cannot be regarded as hmA fide^ and the maker of th^n 
must be held responsible if they turn out to be false.^ 

•.ISk.I>.M8. 

b, Peealltr om in Eqmlty of the torn Fr»«d.— A ■tetanent not known to bo teto 
when mode, but dleooTored to be folee before the oontroot Induced by It it eooght to 
be enforced, eennotgiToriee to on action «r delicto. Yet In the Chanoeiy DlTleion on 
attempt to enforce fuch a oontroot has been treated as fraudulent, and majbo noleted 
Mtnlaground. "AMumlng/*eald Jenel, M. B., In a recent ease, "that fraud moot be 
Aown In order to aet aalde a oontract, 700 hoTO It where a man, having obtained a 
benefldal contract bj a itatement which he now knows to be fklse, taudsts upon keep- 
ing that oontract To do so Is a moral doUnquenoj, no man ought to seek to take 
advantage of his own false statements.** RedgraTO t. Hurd, 90 Ch. D. !& 

But fraud of this sort Is practically the breach of a condition; the promisor Inslsl' 
Ing that though he cannot fulfill his promise the other party |i still bound. This trsad 
am poti facto is a somewhat nnsatlsfaotory creation of the Chanoery DMdom. 9I the 
High Court 

1 In the /xmrts of this ooantry, with few exceptioDB, an action of de^ 
ceit maj be maintained on account of false repreeentationa, when the 
party faj whom th^ were made either knew them to be falae^ or made 



Ghi^^IV.Sti FRAUD. Wl 

Dishonest motire need not be present.— Bat there ii 
another aspect of fraud in which the fraudulent intent is 
absent but the statement made is known to be untrue. 
Such is the case of PolhiU v. Walter cited above. And the 
decision in that case is practically confirmed by the judg 
ment of Lord Cairns in Uie case of Peek v. Oumey^ The 
plaintiff in that case had purchased shares from an original 
aUottee on the faith of a prospectus issued by the directors 
of a Company, and he brought an action of deceit against 
the directors. Lord Cairns in his judgment compared the 
statements in the prospectus with the facts of the condition 
of the Company at the time they were made, and came to 
the conclusion that the statements were not justified by the 
facts of the case. He then proceeded to point out that 
though these statements were false, yet the directors might 
well have thought, and probably did think, that the under- 
taking would be a profitable one. ^^ But," he says, ^ in a 
dvU proceeding of this kind aU that your Lordships have 
to examine is the question. Was there or was there not mis- 
representation in point of factt And if there was, how- 
ever innocent thie motive may have been, your Lordships 
will be oblighed to arrive at the consequences which would 
properly result from what was done.'' 

*The reason for such a rule of law is obvious : if a [*160] 
man chooses to assert what he knows or even sus- 
pects to be false, hoping or even believing that all will turn 

•.SMaali,9.U8:L.&6H.L.4l». 

them in utter disregard of whether they were true or false, or made 
them bdieving them to be true, hut without reaaonahle ground for snoh 
belief and under such drcumetanoee that he wae bound to know the 
truth. Cole v. Gaasidy, 188 Haas. 487; Litchfield ▼. Hutchison, 117 
llasa. 1S5; Walsh v. Morse, 80 Ma 668; GaldweU t. Hemy, 76 Ma 264; 
Johnaon SL Barney, 9 IlL App. 64; Bennett v. Judaon, 21 N. Y. 128; 
Baton V. Winnie, 20 Mioh. 166; Stone T.GoTell, 29 Mioh. 862; Woodruff 
▼. Qamar, 27 Ind. 4; Oabot ▼. Christie, 42 Vt 121; Bristol v. Braid- 
wood, 28 Mioh. 121 ; Manh t. Falker, 40 N. Y. 662. But see Holmes ▼. 
Caark,10 Iowa, 422; TtaeU v. Bennett^ IS Qa. 404;Oos v. Higbj, 100 
FkLSt242. 



80S FORMATION OF OONTRACT. Ftet li 

out well, he cannot be permitted to nrge npon the injure cl 
party the excellence of the motives with which he did him 
a wrong, but must submit to the natural, inferences and 
results which follow upon his conduct 

The representation must be made toith the UUenUon thai 
U ihovld he ctcted upon hy the injured party. 

We may divide this proposition into two parts. Firstly, 
the representation need not be made to the injured party; 
but, secondly, it must be made with the intention that bo 
should act upon it. 

The statement nefd not be made to the injnred party.-^ 
In Laixgridge i), Levy^ the defendant sold a gun to the 
father of the plaintiff f r the use of himself and his sons, 
representing that the gun had been made by Kock and was 
<^a good, safe, and secure gun: " the plaintiff used the gun ; 
it exploded, and so injured his hand that amputation be- 
came necessary. He sued the defendant for the false repre- 
sentation, and the jury found that the gun was unsafe, was 
not made by Nock, and found generally for the plaintiff. 
It was urged, in arrest of judgment, that the defendant 
could not be liable to the plaintiff for a representation not 
made to him; but the Court of Exchequer held that, inas- 
much as the gun was sold to the father to be used by his 
sons, and the false representation made in order to effect 
the sale, and as ^^ there was fraud and damage, the result of 
that fraud, not from an act remote and consequential, but 
one contemplated by the defendant at the time as one of 
its results, the party guilty of the fraud is responsible fro 
(he party injured." * 

•.SlLJfcW.US. 

iBioe T. lianly, 66 N. Y. 83; Bnow t. Judson, 88 Barb. 810; Benlon 
▼. Pratt, 2 Wend. 885. *' A ohemiBt who seUs a bottle of Uqnid made 
up of ingredients known only to himself, representing it to be fit to be 
used for washing the hair, and knowing that it ia to be used bj the pmr- 
ohaaer'a wif «, is liable for an injury oooaaioned to harl9'«fa^:ttfov 



Chap. IV. g t. FRAUD. 809 

But mast be made with intention that he shonld act 
upon It* — But the limitation of this liability is marked bj 
Wood, Y. 0., in Barry i>. Oraakey^ " Every man must bia 
held liable for the consequences of a false repre- 
sentation made by him *to another upon which a third [*161] 
person acts, and so acting is injured or damnified, pro- 
vided it appewr thai suchfdUe representation was mads with 
the intent thai it shotdd he acted upon by such third person 
in the manner that occasions the injury or loss. But to 
bring it within the principle, the injury, I apprehend, must 
be the immediate and not the remote consequence of the 
representation thus made." Therefore in Peek v. Oumey^ 
a body of directors who would have been liable to original 
allottees of shares for false statements contained in the 
prospectus of the Company, were held not to be liable to 
persons who subsequently purchased shares which came 
into the market, on the ground that their intention to de- 
ceive could not be supposed to extend beyond the first 
applicants for shares. So soon as these had been allotted 
''the prospectus had done its work: it was exhausted.'' ^ 

The representation must acttudly deceive. 

h, L.B.OH. L.877;L.B.8H.L.i>.410. 

washing her hair. Qeorge t. Skivington, Law Rep. 6 Ex. 1. And a 
dmggist, who negligently labels a deadly poison as a harmless medicine 
and sells it so labeled to dealers in such articles, is liable for an injury 
to any one who afterwards purchases and usee it, if there is no negli- 
gence on the part of the intermediate sellers or of the person injured. 
Thomas t. Winchester, 2 Seld. 397; Davidson v. Nichols, 11 Allen, 619; 
McI>onald t. Snelling, 14 Allen, 290.** Wellington v. Dawner Kerosene 
Oil Go. 104 Mass. 64. Another illustration of representations, not made 
directly to the injured party, are the representations made to oommer- 
dal agencies by business men regarding their financial responsibility. 
It has been held that where such representations are made falsely with 
the design of procuring large credit and defrauding persons aoting 
in reliance on them, an action of deceit will lie. Eaton t. Avery* S9 
N. ¥• 81; Genessee County Savings Bank y. Mich« Barge Go, OS ICioh, 
164. 
iSee Davidson t. Nichols, 11 AUen, 614 
U 



tlD FOBHATION OF OOKTRACT. Pttt H 

^In an action of deceit* the plaintiff cannot establish a 
title to relief simplj by showing that the defentants have 
made a fraudulent statement: he must also show that he 
was deceived bj the statement^ and acted upon it to his 
prejudice.*' 

Deceit which does not deceive is not fk*and. — In Hor^- 
fall V. Thomas^* the defendant had bought a cannon of the 
plaintiff. The cannon had a defect which made it worth- 
less, and the plaintiff had endeavoured to conceal this defect 
by the insertion of a metal plug into the weak spot in the 
gun. The defendant never inspected the gun; he accepted 
it, and upon using it for the purpose for which he bought it 
the gun burst It was held that the attempted fraud hav- 
ing had no operation upon the mind of the defendant did 
not exonerate him from paying for the gun. ^* If the plug, 
which it was said was put in to conceal the defect, had 
never been there, his position would have been the same;* 
for, as he did not examine the gun or form any opinion as 
to whether it was sound, its condition did not affect 
[*162] him.'' This judgment *has been severely criticised 
by high authority, but it is submitted that it is 
founded in reason. Deceit which does not affect conduct 
can hardly create liabilities;'' and it would seem as reason- 
able to defend an action brought for the price of goods on 
the ground that the seller was a man of immoral character, 
as to maintain that a contract was voidable by reason of a 
deceit practiced by one party which in no way affected the 
judgment of the other. 

«. Oottoo,!.. J.,ArkwTlghlT.N«wbold,17Gh.D.ni 

CL Per BnunweU, B., 1 H. ft 0. W. 

A SeedkstooC Oookbun, a J., In Smith t. HokIim, L. & 6 Q. B. ftl ^ OOBl 

1 Ming T. Wolfolk, 116 U. S. 699; ManhaU ▼. Hubbard, 117 U. S. 415; 
BiBh ▼. Van Cannon, 94 Ind. 968; Crehore t. Crehore, 97 liaas. 880; 
Wells ▼. V^aterhouae, 28 Mo. 181; Branham ▼. Record, 42 Ind. 181; 
Tajlor Y. Gueet, 68 N. Y. 262; BarUetl t. Blaine, 88 lU. 25; MorriaoD 
Oanal Ckk. ▼. Brerett, 9 Paige, 168. 



IV. S 8- FRAUD. til 

Effects of fk*aiid« — We «re now in a position to oonsider 
what is ths effect of Frauds saoh as we have described it to 
be, upon rights «» ecfnJtraab^ 

"We must remember that» apart from Oontract^ the person 
injored by Fraud, such as we have described, has the action 
at Common Law for deceit, and may recover by that means 
saoh damage as he has sustained; and Courts of Equity 
will in like manner grant relief from misrepresentation or 
fraud by compelling the defendant to make good the loss 
sustained by the plaintifiF. * These remedies are not confined 
to cases of Fraud by one of two contracting parties upon 
the other, but to any fraudulent statement which leads the 
person to whom it is made to alter his position for the 
worse. 

But we are concerned with rights arising txcaniriUiiu^ and 
have to consider the particular remedies in respect of af- 
firmation or avoidance of the contract which are open to 
the injured person when he discovers the fraud; and the 
rules with regard to these matters may be shortly stated 
thus: — 

(1) Bight to affirm.— He may affirm the contract and 
sue for such damages as the fraud has occasioned. " There 
is no doubt," said Lord Cairns in nonldswarih v. City qf 
Glasgow Bankj^ ^^ that according to the law of England a 
person purchasing a chattd or goods, concerning which the 
vendor makes a fraudulent representation, may, on finding 
out the fraud, retain the chattel or the goods, and have 
his action to recover any damages he has ^sustained [*16S] 
by reason of the fraud." But the existence of this 
twofold right must depend on the nature of the contract A 
holder of shares which he has been induced to purchase by 
the fraud of the directors cannot retain his shares and sue 
the company in which he is a partner. 






tl% FORMATION OF OONTRACT. Burt n. 

(S) Bight to rescind. — He may avoid the contract, and 
•omay 

(a) resist an action brought upon it at Common 

Law; 
ifi) resist specific performance when soaght in 

Equity; 
(j) obtain a judicial avoidance of the contract in 
Equity. 

(3) Limits of right to rescind. — His right to avoid the 
contract is limited in certain ways. It is true that a man 
may keep the contract open till he is sued upon it, and that 
a plea of fraud then set up is a sufficient rescission of the 
contract; but so long as he keeps it open he does so at his 
own risk.* His right to avoid it may be determined either 
by his accepting some benefit under the contract, or other 
wise acting upon it after he hajs become aware of the fraad; 
or by the subject-matter of the contract being so dealt with 
that the parties cannot be reinstated in their former posi- 
tion; or by innocent third parties acquiring an interest fox 
value under the contract.^ 

And lapse of time, although it does not otherwise affect 
his right to rescind, is evidence to show that he intended to 
affirm, increasing in strength as the recission is delayed. 

It must be borne in mind that the contract, until the de- 
frauded party has made his election, is voidable, and not 

m. Ooiigfa T. London ft N. W. R. Go. L. R. 7 Ex. 8S. 

1 If the intention of the vendor was simply to part with the po ooooai on 
of the goods and not with the title, then there was no sale, and his pnr- 
ohaser could not transfer any title in the goods to a third person. Pos- 
session without title giyes no authority to seU. In a sale of goods, where 
jhe parties intend that it shaU be a cash sale, the purchaser by securing 
possession of the goods cannot transfer any property in them, until 
they are paid for. Kinsey t. Leggett, 71 N. Y. 887; Dean y. Tates, 23 
Ohio St. 888; Decan ▼. Shipper, 85 Pa. St. 239. In Andrew t. Dieterich, 
14 Wend. 81. it is said that no title can pass when the fraud of the pur- 
ohaser amounts to a felony; but see to the contrary, Cochran t. Stew- 
srt» 21 Minn. 485, where numerous decisions are considered 



Obap.IV.§4 DURESa SIS 

roid.* And where fraud is used to induce the owner of 
goods to part with the property in them an innocent third 
party may acquire rights of which no subsequent avoidance 
of the contraet by the defrauded party can divest hint 
For instance, a sale of goods procured by fraud cannot be 
rescinded so as to revest the property in the vendor, if in 
the mean time the goods have been sold to a bona fide pnr^ 
chaser. The right of avoidance being lost, the person upon 
whom the fraud has been practiced must resort to his action 
ex delicto. 

*An exception to this rule occurs when the fraud [*164] 
goes not to the quality of goods, or circumstances of 
the sale, but to the identity of the person contracted with. 
The case of Cundy v. Lindsay^^ cited above, shows that 
where A is induced to send goods to B under the impres- 
sion that he is contracting with X the transaction is abso- 
lutely void, and a bona fide purchaser from B acquires no 
property in the goods. 

§ 4. Duress. 

A contract is voidable at the option of one of the parties 
if he have entered into it under Duress.^ 

In what it consists. — Duress consists in actual or threat- 
ened violence or imprisonment; the subject of it must be 

a. Baboock t. Lawbod, 4 Q. B. D. 3M. 
ft. See ante, p. 124. 

1 Daress. — Duress of the person is of two kinds: Duress of imprison- 
ment, which is compulsion through illegal restraint of one*s personal 
liberty, and duress per mindS, which is compulsion through rational 
fear of loes of life, of mayhem, or of imprisonment. In many states of 
the Union it has been contended that although the imprisonment be 
legal, if the process was sued out maliciously and without probable 
cause, or with probable cause but for an unlawful purpose, the party 
impriaoned was under duress. Severance v. Kimball, 8 N. H. 886; Wat^ 
kina t. Baurd, 6 Mass. 506; Strong v. Orannis, 26 Barb. 123; Bowker v. 
LoweU, 49 Me. 429; Work's Appeal, 69 Pa. St 444; Taylor y. CottreU, 
16 DL 9& In Phelps v. Zuchli^, 34 Tex. 871, it is said that the common 
law role has been modified to that extent by the weight of authori^. 
See Ooolej on Torti^ 606. 



214 FOBHAHON of OONT&ACr. Fwt IL 

the oontracting party himself , or his wife, parent, or ohild; 
and it must be inflicted or threatened bj the other party to 
the contract, or else by one acting with his knowledge and 
for his advantage.* 

Hast affect promisor. — A contract entered into in order 
to reUeve a third person from duress is not voidable on that 
ground;* though a simple contract, the consideration for 
which was the discharge of a third party by the promisee 
from an illegal imprisonment, would be void for unreality 
of consideration. 

And must be personal. — Nor is a promise voidable for 
duress which is made in consideration of the release of 
goods from detention.* If the detention is obviously wrongs 
ful the promise would be void for want of consideration; if 
the legality of the detention was doubtful the promise might 
be supported by a compromisa But money paid for the 
release of goods from wrongful detention may be recovered 
back in virtue of the quasi-contractual relation created by 
the receipt of money by one person which rightfully be- 
longs to another.^ 

§6. Undue If\/hienc&. 

We have described the kind of Fraud which gives rise to 
the action of deceit, and the efiFect of Fraud of that descrip- 
tion upon the validity of a contract But it may 
[♦165] *well be that persons are induced to enter into con- 
tracts not by any specific statement of a fraudulent 
character, but by reason of circumstances placing it in the 

m, 1 Bolle, Abr. 888. 

h, HuMombe ▼. StandJas, Ora Jao. 187; ne uite, p. SH 

<L AUee T. BackhouM, i M. ft W. 888; ne pcwt, Quaai-OoBtnot 

1 Duress of goods exists when one is compelled to submit to an illegal 
exaction in order to obtain them from one who has them, but refuses to 
surrender them unless the exaction is endured. Gooley, J.» in Hackly 
V. Headlej, 45 Mich« 670; Scholey v. Mumford, 00 N. T. 498; Chandler 
V. Sanger, 114Maas. 864; Spaids t. Barrett, 07 lU. 288; Radioh t. Hutoh- 
ins^ 86 U. S. 218; GoUins v. Weetberry, 8 Bay, 811; Harmonj v. Bing 
tern, 18 N. Y. 88. 



Ch^ IV. § S. UNDUE INFLUENCE. tU 

power of others to engage them in disad vantageoiis bargaini 
or promises. 

Equity has always given a wider interpretation to the 
teim Fraud than that which the Common Law adopted. 
Looking beyond definite false and fraudulent statements, 
they have inferred from a long course of conduct, from the 
peculiar relations of the parties, or from the circumstances 
of one of them, that an unfair advantage has been taken of 
the promisor, and that his promise ought not in equity to 
bind him. The taking of such an unfair advantage is some 
times called Fraud; but it is more convenient, for the pur- 
pose of distinguishing it from the kind of Fraud with which 
we have already dealt, to call it the exercise of ^' Undue 
Influence." 

The subject is one which can only be dealt with in the 
most general way; it depends upon the view taken by the 
Court of the general tendency of transactions, often extend- 
ing over some time, and consisting of many details, whether 
or no relief is granted. It is significant of the nicety of the 
questions of fact involved in cases of this description, that in 
a recent judgment of the House of Lords on appeal from 
the Irish Court of Chancery,' Lord Hatherley differed from 
Lords Blackburn and Gordon as to the propriety of grant- 
ing relief, and the whole court differed from Lord Justice 
Christian as to the moral character of the acts complained of. 

Definition of undue influence. — It is well to try to ob- 
tain some sort of definition of Undue Infiuence before en- 
deavouring to classify the sets of circumstances which have 
been held to suggest its existence. The best is to be found 
in the judgment of Lord Selbome in The Earl of Ayle%f(yrd 
V. Morris.^ In speaking of the sort of cases '* which, accord- 
ing to the language of Lord Hardwicke, raise fr<ym, the cir- 
eumetanees and conditions of the parties contracting 
*a presumption of Fraud^^ he says, " Fraud does not [*166] 
nere mean deceit or circumvention ; it means an uncoil 

«. O*B0fiDtT. BoUBcbrok*. • App^ Oil 814 
kaCk.lHL 



916 FORMATION OF OONTRACT. Flurtll 

$oiefUiou9 use of the power arismg oat of these eircumstancek 
and conditions; and when the relative position of the parties 
is such as prima facie to raise this presumption, the trans- 
action cannot stand unless the person claiming the benefit 
of It is able to repel the presumption by contrary evidence, 
proving it to have been, in point of fact, fair, just, and rea- 
sonable." > 

Presumption f^om eircnmstances. — In attempting to 
idcertain the principles upon which this presumption is 
raised, we may note at starting — 

(a) that equity will not enforce a gratuitous promise even 
though it be under seal;' 

(fi) that the acceptance of a voluntary donation throws 
npon the person who accepts it the necessity of proving 
** that the transaction is righteous; " * 

if) that inadequacy of consideration is regarded as an 
element in raising the presumption of Undue Influence or 
Fraud;* 

{8) but that mere inadequacy of consideration will not 
(according to the strong tendency of judicial opinion] 
amount to proof ^ of either.' 

a. Kekewicb ▼. M&nnln^, 1 D. M. Q. 18a 

b. HofchtoD ▼. HoKhton, 15 BeaT. 299. 
•. Wood ▼. Abrey. 8 Maddook, ASH. 
d. ColM ▼. Treoothlck, 9 Vm. 846. 

1 ** The line between due and undue influence, when drawn, must be 
frith fuU recognition of the liberty due every true owner to obey the 
▼oioe of justice, the dictates of friendship, of gratitude and of benevo- 
lence, as well as the claims of kindred, and, when not hindered by per- 
sonal incapacity or particular regulations, to dispose of his own property 
according to his own free choice." Graves, Ch, J., in Wallace ▼. Harris, 
82 Mich. 897. Influence which will avoid a will or deed must be exerted 
to buch a degree as to amount to force or coercion in destroying free 
agency. Layman v. Conniy, 60 Md. 28H; Latham v. Udell, 38 Mich. 88a 
Modest persuasion and arguments and Hp)>ealM to t)ie affections are not 
inproper. Schofleld v. Walker. 5b Mich. 96; Wiae v. Foote, 81 Ky. 10; 
Black ▼. Foljambre, 89 N. J. E<). 2:54. 

8 While mere inadequacy of consideration is insufficient eTidence of 
tend or undue influence, still where the inadequacy is lo grosi as to 



Ctmi^ IV. 1 8. UNDUE INFLUENGIL t17 

We may therefore frame the question which we have to 
difloiUB somewhat in this way: — When a man demands 
equitable remedies, either as plaintiff or defendant, seeking 
to escape the effects of a grant which he has made gratn- 
itonsly or a promise which he has given upon a very in- 
adequate consideration, what must he show in addition to 
this in order to raise the presumption that Undue Influence 
has been at work? 

Or firom relations of parties; parental. — One class of 
circumstances calculated to raise this presumption appears 
to be that the party benefited stood in some such relation to 
him as to render him peculiarly subject to influence. Parental 
or qiiasi-parental relations subsisting between promisor and 
promisee will raise this presumption. In Archer v. 
Hudsanf a young lady who had just attained *her [*167] 
majority became security for her undo to enable 
him to overdraw his account at his banker's. She was an 
orphan, and had resided with her uncle for seven years pre- 
vious to the transaction. The Master of the Bolls, advert- 
ing to the fact that the security was obtained through the 
influence of a person standing in loeo parmtU^ from the 
object of his protection and care, said, ^' This is a transaction 
which under ordinary circumstances this Court will not 
allow. • • • This Court does not interfere to prevent an 
act even of bounty between parent and child, but it will 
take care (under the circumstances in which the parent and 
child are placed before the emancipation of the child) that 
such child is placed in such a position as wiU enable him to 
form an entirely free and unfettered judgment^ independent 
altogether of any sort of control" 



ihock tbe consoieiioe snd oommon seiise of aU men, it may amoont to 
proof of fraud. 8 Pomeroy on Eq. Juria. 027. A volantary donation 
and the opportunity to exert an undue influence do not amount to proof of 
it» where there la nothing further unusual in the transaction. Re liartin, 
9S N. T. 108; Montague ▼. AUen, 78 Va. 502; Carter ▼. Dixon, 60 Ga. 82; 
Poflt T. IfMon, 01 N. T. 680 ; Dale y. Dale, 88 N. J. Eq. 860. 



ilB FORMATION OF OONTRAGT. FtetlL 

And one may extend the term " parental relations " to all 
cases in which one member of a family exercises a sabstan- 
tial preponderance in the family councils* either from age 
or from character or from circumstances. 

Spiritual or confidential.— The power which a spiritual 
adviser may acquire over persons subject to his influence is 
also looked upon as raising the presumption of malajldes; * 
and to this may be added a number of relations which it is 
somewhat hard to define, but which may generally be 
termed *' confidential." Solicitor or advocate and clienti 
guardian and ward, doctor and patient, trustee and eatui 
que trust, are some of these.^ 

Influence^ however acquired, may raise presumption of 
unfair dealing. — But the Courts have shown themselves 
unwilling to limit or define the relations which they will 
regard as raising the presumption of influence, being more 
inclined to reserve to themselves the power of inquiring 
whether influence was in fact exercised, than to reject the 
possibility of such exercise because the parties did not stand 
in certain special relations. The principle applies to every 
case where ^' influence is acquired and abused, where confi- 
dence is reposed and betrayed.'* 

In Smith v. Kay^ the defendant, who had barely 
[*168] attained *his majority, had incurred liabilities to the 
plaintiff by the contrivance of an older man who 
had acquired a strong influence over him, and who professed 
to assist him in a career of extravagance and dissipation. 
It was held that influence of this nature, though it certainly 
could not be called parental, spiritual, or flduciary, entitled 
the plaintiff to the protection of the Court 

•. Harrey ▼. Mount, 8 BeaT. 4S9. 

%, Huguenln ▼. Baseley, 14 Vesey, 87S. 

c 7H.L.a7&0. 

1 1 Marx ▼. McGlynn, 88 N. Y. 857: St. Leger*8 Appeal, 84 Conn. 484: 
Drake's Appeal, 45 Conn. 9. In Thompson y. Hawks, 14 Fed. R. 903, a 
wiU was set aside, when the testator's belief in spiritualism was artfally 
used bjT the beneficiary, a spirit medium, so called, to alienate him from 
his only son and child and to obtain his property. 



Cbap. IV. g S. UNDUE INFLUENGE. S19 

^It is noV' 8&id Lord Kingsdown, ^' the relation of solic- 
itor and client, or trustee and oestm que trust, which consti- 
tutes the sole title to relief in these cases, and which imposes 
apon those who obtain such securities as these the duty, 
before they obtain their confirmation, of making a free dis- 
closure of every circumstance which it is important that the 
individual who is called upon for the confirmation, should 
be apprised of. The principle applies to every case where 
influonce is acquired and abused, where confidence is re- 
posed and betrayed. The relations with which the Court 
ol Chancery most ordinarily deals are those of trustee and 
cestui que trust, and such like. It applies specially to those 
cases, for this reason and for this reason only, that from 
those relations the Court presumes confidence put and ir^fkh 
ence exerted. Whereas in all other cases where those rela- 
tions do not subsist, the confidence and the infi/uence must 
le proved eoptrinsicaUy; but where they are proved extrin- 
sically, the rules of reason and common sense and the tech- 
nical rules of a Court of Equity are just as appUcable in 
the one case as the other." ' 

Personal Influence may be absent. — The doctrine has 
been extended to a class of cases from which the element 
of personal influence is altogether absent. It remains to 
consider the characteristics of these cases. 

Catching bargains. — They all appear to possess these 
common features: the promisor encumbers himself with 
heavy liabilities for the sake of a small, or, at any rate, an 
inadequate present gain; and the promisee takes advan- 
tage either of the improvidence and moral weakness, or 
else of the ignorance and unprotected situation, of the prom- 
isor. 

♦In former times the law attempted to guard in [*169] 
two ways against advantage being taken of persons 
in such a situation. Usury Laws provided that a promise to 

•.TH.li. aim 



890 FOBMATION OF CONTBACT. Ptet U 

pay intereBt beyond a certain rate per cent shonld be irmd, 
and thns prevented extortionate loans of money. And the 
Oonrt of Chancery adopted a mle that the purchaser of any 
reyerBionary interest might always be called upon to show 
that he had given full value for his bargain, so that he 
might not take advantage of a man's present necessities 
to deprive him of his future estates without reasonable re- 
turn. 

Expeetant heir. — The Usury Laws are repealed, and the 
81 and 8S Yict a 4, abrogates the rule of law as to rever^ 
sionary interests in all cases of purchases made bona iUU 
and without fraud or unfair dealing. But if a nuin takes 
advantage of the present poverty of an expectant heir to 
extort from him an exorbitant and ruinous rate of interest, 
he is liable to have the bargain set aside, and to be remitted 
to his claim for so much money as he has actually ad- 
vanced,* with the current rate of interest upon it. 

Person in present distress.— And, on similar grounds, 
a man who l^argains on terms of inequality as to age or 
knowledge with the promisee is considered to be entitled to 
the protection of the Court of Chancery. "In ordinary 
cases each party to a bargain must take care of his own 
interest, and it will not be presumed that undue advantage 
or contrivance has been resorted to on either side; but in 
the case of " the expectant heir," or of persons under pres- 
sure, without adequate protection,^ and in the case of dealings 
with uneducated, ignorant persons, the burden of showing 
the fairness of the transaction is thrown on the person 
who seeks to obtain the benefit of the contract.'' ^ 

m. Lord Ayktf ofd t. Morrti, 6 Oh. 4B4. 

k Per Loitl HatlMriey tai 0*Borke ▼. BoUnffbralra, % App. Oil at pi SBlL 

1 The oommon law rule regarding purchasea for expectant hein ib said 
to prevail in this oountrj. But few imitanoes of its application wiU be 
found. 1 Story, £q. 886 ; Jenkins ▼. Pye, 13 Peters, 341 ; Chesterfield t. 
Janssen, 1 Lead« Csa. in Eq. 690. In Mayo ▼. Garrington, IS Qratt 74, 
t is bald that mere inadequaoj of consideration, unless it be so great 



Ohap. IV. g 8. Uin)nB INFLUENCE. S91 

The Court will look not merely to the acts of the parties, 
bat to the reasonableness of the transaction under all the 
Gircumstances of the case; and if it appear that one has 
taken advantage of the unprotected condition of the other 
to drive a hard bargain, the transaction will not be allowed 
to stand.* 

Limits of right to rescind. — ^The rules respecting 
the right to rescind contracts entered *into under [*170] 
Undue Influence follow, so far as equity is concerned, 
the rules which apply to Fraud, but with one noticeable 
qualification. In the case of Fraud, so soon as the Fraud 
is discovered the parties are placed on equal terms, and an 
affirmation of the contract binds the party who was origi- 
nally defrauded. But in the case of Undue Influence it is 
not a particular statement, but a combination of circum- 
stances which constitutes the vitiating element in the con- 
tract; and unless it is clear that the will of the injured 
party is relieved from the dominant influence under which 
it has acted, or that the imperfect knowledge with which 

▼.Oook,10Ch.8». 



M to shock the moral sense, is insufficient to avoid the sale of a rever- 
sionary interest Ruple y. Bindley, 91 Pa. St 296; Bacon y. Bonham, 
88 N. J, Eq. 617. A more common illustration of the rule that no ad- 
vantage must be taken of persona in vinctUia is the sale by a mortgagor 
of his equity of redemption to the mortgagee. If the mortgagee take 
any undue advantage of the mortgagor, equity wiU compel him to re- 
deed the property on receiving his debt and interest Bigelow on 
Frauds, 25a '* Courts of law as weU as of equity very frequently re- 
fuse to cany out the express agreements of parties when the result 
would be grofls in justice to one, without any corresponding loss to the 
other, calling for such injustice. Especially should this be the case where 
an agreement made between mortgagor and mortgagee, or borrower and 
lender, is sought to be enforced or interposed as a defense. The law 
does and should scrutinize clearly all such agreements and refuses te 
enforce them, especially where to do so would be both unjust and nn- 
oonscioiiable.'' DorriU v. Eaton, 86 Mich. 808; Butler t. Dnnon, 47 
1Cich.9i. 



823 FORMATION OF OOMTRAGT. Fttt IL 

he entered into the contract is supplemented by the fullest 
assistance and information, an aflSrmation will not be allowed 
to bind hint*^ 

m, MozoB ▼. BikjiM, 8 Ch. 0L 

1 By the propoBed New York Code undue Influenoe !■ nid to oousisi 
(avil Ckxle, p. 281): 

1. In the use, by one in whom oonfidenoe !■ repoeed by another, or 
who holde a real or apparent authority oyer him, of such oonfidenoe 
or authority for the purpoee of obtaining an unfair advantage orer him. 
(Bears t. Shafer, 6 N. T. 268, 272; Bergen y. UdaU, 81 Barb. 9; Brook 
T. Barnes, 40 Barb. 521 ; Taylor ▼. Taylor, 8 How. 188.) 

8. In taking an unfair advantage of another's weakness of mind. 
dTTBcy y. Sackett, 1 Ohio St 68; Bippy y. Orant» 4 Ired. Eq. 448; Dunn 
y. Chambers, 4 Barb. 876.) 

8. In taking a grossly oppressive and unfair advantage of another's 
neoessities or distress. (Cases in support of the last proposition are gen- 
sraUy classed under the head of fraud.) 



CHAPTER V. 
Legality of Object 

Thkbb is one more element in the formation of contract 
which remains to be considered — the object of the parties. 
Certain limitations are imposed by law upon the freedom 
of contract. Certain objects of contract are forbidden or 
discouraged by law; and though all other requisites for the 
formation of a contract be complied with, yet if these ob- 
jects are in contemplation of the parties when they enter 
into their agreement the law will not enforce it 

Two matters of inquiry present themselves in respect of 
this subject The first is the nature and classification of the 
objects regarded by law as illegal The second is the effect 
of the presence of such objects upon the contracts in which 
they appear. 

§ 1. Natmre qf Illegality in ContracL 

What Is illegality! — The modes in which the law ex- 
presses its disapproval of certain objects of contract may be 
described as follows: — 

(i) Prohibition by Statute, 

(ii) Prohibition by express rules of Common Law. 

(iii) Prohibition through the interpretation by the Courts 
of what is called " the policy of the law." 

80 that illegal agreements may be (1) agreements in 
breach of Statute, (2) agreements in breach of express 
rules of Common Law, (3) agreements contrary to public 
policy. 

♦These two last are not always very easy to dis- [*172] 
tinguish, for frequent decisions upon certain matters 
of public policy have caused tolerably definite and express 



i2^ FORMATION OF OONXBACT. Ptat n 

roles regarding them to grow up; and these are in efFect 
rales of Common Law as express, or nearly so, as those with 
which we shall deal under class 2. 

(i) OofUraoti which are made in breach qfS^ute. . 

Illegality from statutory prohibition. — A statute may 
render an agreement illegal in one of two ways — by ex- 
press prohibition, or by penalty. It may say, in so many 
words, that contracts of a certain sort are illegal, or void, 
or both; and where it thus expressly avoids a contract or 
makes it illegal, no doubt can arise as to the intentions of 
the Legislature. 

Illegality from imposition of a penalty, how ascer- 
tained. — But where the statute does no more than impose 
a penalty upon the carrying out of the objects of a contract, 
a question may arise whether or no the penalty amounts to 
a prohibition. Two marks may assist us to determine the 
intention of the Legislature. The first of these is the ob- 
ject of the penalty. If it be " a protection to the public ss 
well as the revenue," ' if it be designed to further objects 
of public policy in relation to some trade or business, then 
a penalty amounts, without doubt, to a prohibition. If it 
be solely to facilitate and secure the collection of the rev- 
enue, then it is possible that the contract, though penalised, 
is not prohibited. The soundness of this distinction has 
however been called in question,* and a more important 
mark is to be found in the continuity of the penalty.^ 

flb Broim T. DuBoaii, 10 B. A 0. M. 

k Oajf ▼. BowUmuU, S M. a W. at i». IM. 

1 The authorities are agreed that a contract is illegal, the sabject-mat- 
ter of which is forbidden by the statute, or is in violation of a statute for 
the protection of the public against imposition or fraud ; or for the pro- 
tection of the public health or morals, or when the contract is against 
public policy. Brackett ▼. Hoyt, 29 N. H. 2M; BuU y. Harrigan, 17 B. 
lion. 853; Woods ▼. Armstrong, 64 Ala. 164; Griffith y. Weils, 8 Denio, 
S96; DUlon y. AUen, 46 Iowa, 299. 

BrowD T. Duncan. — The principle announced in Brown y. Duncan 
has been recognixed in this country by the courts generaUy. Handel- 



T.,§ 1. LEGALTTT OF OBJECTT. 92A 

Where a statute forbids the carrying on of a trade except 
under certain conditions, on pain of incurring a specified 
penalty once for all, it has been held that contracts made 
in breach of such provisions are not yitiatedL' But where 
the penalty is recurrent upon every breach of the provisions 
of the statute, then there can be no doubt that the objects 
of the contract are intended to be regarded as illegal, and 
the contract itself void. 

^Result of eases. — The law then upon this point [*178] 
may be summarised thus. Where a penalty is in- 
flicted by statute upon the carrying on of a trade or business 
in a particular manner, we may assume prima facie that 
contracts made in breach of such statutory provisions are 
illegal and void. But if it appear that the penalty is im* 
posed, not for the benefit of the public in general, but for 
the security of the revenue, it is poanble that the contract 
was only intended to be penalised and not prohibited. And 

a. Smith T. Kawhood, 14 H. A W. 488. 

banm ▼. aregorich, 17 Ney. 05; Farer y. Philbriok, 7 N. H. 840; Lewis 
▼. Welch, U N. H. 296; Larnered y. Andrew, 106 Maae. 485; Corning t, 
Abbott, 54 N. H. 471; Rather v. First Nat Bank, 03 Pa. St. 808. The 
testSy however, which the case suggests for determining when a penal^ 
amoonts to a prohibition are frequently regarded as unsatisfactory. 
Thpagh the statute may' be solely to facilitate and secure the collection of 
file revenucb courts are reluctant to sustain a contract, where the effect 
would be to encourage the violation of the revenue laws. Greenhood, 
Flib. Pol. 682. The question after all is, did the legislature intend to 
prohibit the making of the contract in question? The language of the 
statute is first to be considered and then the subject-matter of it, the 
wrong or evil which it seeks to remedy or prevent, the purpose to be ac- 
complished, and finally, the legislative intent is to be ascertained and 
the statute enforced accordingly. Aiken v. Blaisdell, 41 Yt 668; Pag^ 
bom V. Westlake, 86 Iowa, 540; Griffith v. Wells, 8 Denio, 227; Dillon 
T. AUen, 46 Iowa, 200; BeU v. Quinn, 2 Sandf. 146; Best v. Bunder, 80 
How. Pr. 4M ; Buckman v. Bergholz, 87 N. J. L. 488. There are some de- 
cisions in support of the proposition, without qualification, that when a 
statute inflicts a penalty for doing a particular act, that act is, by 
implication, prohibited and illegal Pray v. Burbank, 10 N. H. 878; 
Kleckly t. Leyden, 68 Gku 215; Durgen t. Dyer, 68 Me. 148; DoeT, 
Bumham, 81 N. H. 426; Hallett v. Novion, 14 Johns. 278; Bacon r. Lee^ 
4 Iowa» 400; Garmel v. Kitchen, 20 & a 480. 
Iff 



tM FORMATION OF CONTRACT. Flut H 

il^ in addition to this, it appear that the penalty is imposed 
once for all upon the offending trader, and not upon each 
successive contract continuously, it is highly probable^ if not 
certain, that contracts so made are not intended to be viti- 
ated. 

Objects of statutory prohibition.— It is not necessary 
or desirable to discuss here in any detail the various stat- 
utes by which certain contracts are prohibited or penalised. 
They relate (1) to the security of the revenue; (2) to the 
protection of the public in dealing with certain articles of 
commerce, (3) or in dealing with certain classes of traders; 
(4) to the regulation of the conduct of certain kinds of 
business. An excellent summary of statutes of this nature 
is to be found in the work of Mr. Pollock,* and it is not 
proposed to deal further with them here. 

Wagering contracts. — There is however one class of con- 
tracts which, from its peculiar character and from the vari- 
ous forms in which it has been dealt with by the Legislature, 
it is worth while to examine more particularly. These 
contracts are Wagering Contracts. The subject has been 
somewhat confused by the use of the word wager as a term 
of reproach, so that some contracts not permitted by law 
have been called wagers, as opposed to others which, while 
precisely similar in their nature, will be enforced by Courts 
of Law if they comply with certain conditions. 

What is a wager I — A wager is a promise to pay money 
or transfer property upon the determination. or ascertain- 
ment of an uncertain event; the consideration for 
[*174] such a promise is either a present *payment or 
transfer by the other party, or a promise to pay or 
transfer upon the event determining in a particular way. 

The event may be uncertain because it has not happened, 
or it may be uncertain because it is not ascertained, at any 
rate to the knowledge of the parties. Thus a wager may 
be made upon the length of St. Paul's, or upon the result 
of an election which has already happened| though the par 

a. Fdlook, ^ cat. td. 4. 



.cliaiwV.gl. LEGALITY OF OBJECT. 327 



i do not know in whose favonr it has gone. The oncer- 
tftinty then resides in the minds of the parties, and the 
subject of the wager may be said to be rather the accuracy 
of each man's judgment than the determination of a par- 
ticular event.^ 

Marine Insurance is a wager. — It is obvious that a wager 
may be a purely gambling or sporting transaction, or it may 
be directed to commercial objects. A man who bets against 
his horse winning the Derby is precisely in the same position 
as a man who bets against the safety of his own carga 
Yet we should not hesitate to call the one a wager, while 
the other is called a contract of marine insurance. A 
has a horso likely to win *the Derby, and therefore [*176] 
a prospect of a large return for money laid out in 
rearing aid training the horse, in stakes and in bets; he 
wishes tc secure that he shall in no event be a loser, and 
he agrees with X that, in consideration of X promising 
him £4:j(f00 if his horse loses, he promises X £7,000 if his 
horse \ir ins. 

The lame is his position as owner of a cargo: here too 
he haf a prospect of large profits on money expended upon 
a car/;o of silk, here too he wishes in no event to be a loser, 
and ie agrees with X, an underwriter, that in considera- 

m. 1 1 would nem thai to constitute % wager the transaction between the parses must 
wbol J depend on the risk in contemplation, and that neither must look to anything 
Imft he payment of money on the determination of an uncertainty. 

O iierwise a guarantee would be a wager, since it is a promise by ^ to answer to X 
tat the possible and uncertain default of M. But here the promise of ^ is supported 
b; the consideration that X supplies M with goods, senrioes or money. If the sum 
g aianteed by ^ to X were largely in excess of the consideration furnished, the tran» 
f stioii would be pro tanto a wager upon the solvency of If. The definition of a wag- 
rteg oontraot cited by Professor Holland, in the French Code, seems fSulty in this 
espeel. It Is said to be '' one the effects of which, as to both profit and loss, 
rbether for all the parties or for one or several of them, dnpend on an uncertain 
tnmL** nils would include any agreement in which the profit and loss of one party 
lepended on a contingency. If, for instance, A undertook to paint a portrait of X, to 
be paid a certain price If M approved the likeness, otherwise nothing, such a transa^ 
tkm would be a wager by the French Code. But what the parties contemplate Is that 
A dwuld giro skUl, labour, and material, and should be paid only if M certUj to tha 
value of his work. 

Booh a transaction Is wholly different to an agreement to pay money dependent oa 
the saMy of ^"sdiip, the length of JTft llCa» tho imniunllgr o< X*b hoiHe fk<oia tm, 
JuilivrataMa, M7, ed. H art 1901 



an FORMATION OF OONTBACT. P&rt VL 

tion of his paying X£ — ^ Xpromises to pay him £ — if bis 
oargo is lost by certain specified perils. 

The law forbids A to make snch a contract nnless he has 
what is called ^ an insurable interest " in the cargo, and con- 
tracts in breach of this rule have been called mere wagers, 
while those which conform to it have been called contracts 
of indemnity. But such a distinction is misleading. It is 
not that one is and the other is not a wager: a bet is not 
the less a bet because it is a hedging bet; it is the fact that 
one wagering contract is and the other is not permitted 
ly kkw which makes the distinction between the two. Apart 
from this there is no real difference in the nature of the 
contracts. 

Life insurance Is a wager. — A life insurance is in like 
manner a wager. Let us compare it with an undoubted 
wager of a similar kind. A is about to commence his in- 
nings in a cricket match, and he agrees with X that if X 
will promise to give him £1 at the end of his innings, he 
will pay X a shilling for every run he gets. A may be 
said to insure his innings as a man insures his life; for the 
ordinary contract of life insurance consists in this, that A 
agrees with Xthat if X will promise to pay a fixed sum on 
the happening of an event which must happen sooner or 
later, A will pay to Xso much for every year that elapses 
until the event happens. In each of these cases A sooner 
or later becomes entitled to a sum larger thaii any of the 
individual sums which he agrees to pay. On the 
[*176] *other hand, he may have paid so many of these 
sums before the event takes place that he is ulti- 
mately a loser by the transaction. 

History of the common law as to wagers.— Let us now 
turn to the history of the law respecting wagering contracts. 

At Common Law wagers were enforceable,^ and, until the 

1 Gilbert v. 8jkes.^In manj of the American states the English 
doctrine that wagers were enforceable has not been adopted or approTed, 
and the courts have held that aU wagers upon subjects in which the 
parties have no interest are void. This is said to h«Te been the rule ia 



€hiV'T.§L LEQALTTY OF OBJBCT. ttt 

latter, part of the last century, were only discouraged by 
the Courts by the imposition of some trifling difflcnities of 
pleading/ Oradaally however the Courts, finding that 
fnyoious and sometimes indecent matters were brought be- 
fore them for decision, established the rule that a wa^er 
was not enforceable if it led to indecent evidence, or was 
calculated to injure or pain a third person; and in some 
cases general notions of public policy were introduced to 
the effect that any wager which tempted a man to offend 
against the law was illegal 

Strange, and sometimes ludicrous, results followed from 
these efforts of the Courts to discourage the litigation of 
wagers.* A bet upon the duration of the life of Napoleon 
was held to be unenforceable, as tending, on the one side, 
to weaken the patriotism of an Englishman, on the other, 
to encourage the idea of the assassination of a foreign ruler, 
and so to provoke retaliation upon the person of our own 
sovereign. But it is evident that the substantial motive 
which pressed upon the judges was '^ the inconvenience of 
countenancing idle wagers in courts of justice," the feeling 
that " it would be a good rule to postpone the trial of every 
action upon idle wagers till the Court had nothing else to 
attend to/' 

•. Jaekwm T.Colegmte (10O4X Oarthafr, ^ 881 
». Gilbert T.SykM (1819, 18 EMt» 160. 

tiie New England States. Love ▼. Barvej, 114 Haas. SS; Amorj t. Gil> 
man, 8 Haas. 1; Perkins t. Eaton, 8 N. H. 158; Rioe ▼. Ooet, 1 Strobh. 
(8. G.) 88; Whe^er t. Spencer, 16 Conn. 80; Wilkinson y. Tousley, 16 
Minn. 888: Eldred y. liaUoy, 8 CoL 880. In Eldred y. MaUoy, Betford, 
J., said : " Notwithstanding the fact that contracts of wager have been 
regarded as yalid at common law, a disposition has been steadily grow- 
ing in all respectable courts to discountenance and ignore them. It is 
goneraUy' conceded that the principle was engrafted on that system at a 
time when but little consideration was given to the subject.** In Wil* 
kinson v. Tousley, Berry, J., insisted that the English rule was a pei^ 
version oi the common law and ought to be condemned by the court, 
and held that in Minnesota all wagers were invalid. They are so, now, 
by the statutes of nearly every American state, and it is evident that <f 
the legislatures had not changed the common law rule the courts wooU 
have doom so sse ttiia. 



tao FOE1£ATION OF OONTBACT. Part IL 

Statute as to wagers. — Meantime the Legislature dealt 
with various forms of wagering contracts. As regards 
purely sporting wagers the history of legislation extends 
over a century and a half. It was enacted by 16 Car. IL 
0. 7, that any sum exceeding £100 lost in playing at 
games or pastimes, or in betting on the players, should 
be irrecoverable, and that all forms of security givea for 
money so lost should be void. The 9 Anne, c. 14, carried 
the law upon this point a stage further, enacting. 
[•177] that *securities of every kind, given for any sum 
lost in playing at games, or betting on the players, 
or knowingly advanced for such purposes, should be void; 
and that the loser of £10 or more might recover it back, if 
paid, by action of debt brought within three months of 
payment. 

Cases of hardship resulted from the working of this Act 
It often happened that securities thus avoided were pur- 
chased from the holders of them by persons ignorant of 
their illegal origin. These persons, when they sought to 
enforce them against the giver of the security, discovered, 
too late, that they had paid value for an instrument which 
was void as against the party losing at play. The 6 & 6 
Will. IV. c. 41, therefore repealed the Act of Anne so far 
as regarded the avoidance of securities as specified in that 
Act, and provided that they should henceforth be taken to 
have been originally given upon an illegal consideration. 
The effect of this was, that the holder of such an instru 
ment, if it were established after proof of i{s illegal incep 
tion that he was a '^honafde holder for value," could 
enforce it even against the man who had given the security 
in payment of an illegal bet.^ 

The last enactment relating to wagers of this class is the 
8 & 9 Vict c. 109, which provides, 

" That all contracts or agreements, whether by parol or 
in writing, by way of gaming or wagering, shall be null 

ML 8MPMrtni,eh.a 



Chap. V, 8 1, LEGALITY OF OBJECT. 281 

and void ; and that no suit shall be brought or maintained 
in any Court of Law or Equity for recovering any sura of 
money or valuable thing which shall have been deposited 
in the hands of any person to abide the event on which any 
wager shall have been made. Provided always that this 
enactment shall not be deemed to apply to any subscription 
or contribution or agreement to subscribe or contribute for 
or towards any plates, prizes, or sum of money to be 
awarded to the winner or winners of any lawful Game, 
Sport, Pastime, or Exercise." 

Effect of last two statutes. — The same Act repeals the 
Statutes of Charles and Anne, but does not affect the pro- 
vision of 5 & 6 Will. IV. c. 41, as to securities. All 
wagers therefore are now simply null and *void, but [*178] 
securities given in respect of them still fall into two 
classes. 

Consideration illegal. — A promissory note given in pay- 
ment of a bet made upon a cricket match is tainted with 
illegality at the outset; not only is it void as between the 
original parties to it, but every subsequent purchaser may 
be called on to show that he gave value for the note ; and 
if it can be shown that he knew of the illegal consideration 
for which it was first given, he may be disentitled to re- 
cover upon it.* 

Promise void. — A promissory note given in payment of 
a wager upon the result of a contested election would, as 
between the parties to it, be given on no consideration at 

1 Illegality of consideration is no defense to a note that has passed into 
the hands of a bona fide purchaser, unless the statute expressly or by 
necessary implication declares that the in.strument giyen on such illegal 
consideration shall be absolutely void. Vallett v. Parker, 6 Wend. 615; 
Tbwn of Eagle y. Kohn, 84 Dl. 292; Glenn v. Farmers* Bank, 70 N. C. 
191; Paton y. Coit, 6 Mich. 605; Root y. Merriam, 27 Fed. Rep. 909: 
Fuller y. Green, 64 Wis. 159; Cunningham y. National Bank of Au- 
gusta, 71 Ga. 400; Traders' Bank y. Alsop, 64 Iowa, 97. But when the 
note lb void by statute, eyen a bona fide holder cannot reooyer on it. 
Id.; Aurora y. West, 22 Ind. 88; Unger y. Boas, 18 Pa. St 601; Bridgv 
▼. nabbaxd, 15 Maaa. 96; Andrews y. Hozie, 5 Tex. 171. 



t» FORMATION OF CONTRACT. Furi U 

ally inasmnch as it is given in discharge of an obligatioB 
which does not exist But the wager is not illegal, it is 
simply void; and if the note be endorsed over to a third 
party, it matters nothing that he was aware of the ciroam- 
stances under which the note was originally given; nor 
does it lie upon him to show that he gave value for the 
note,* though he could not recover if it were proved that he 
gave none.^ 

As regards wagering contracts entered into for commer- 
cial purposes, there are three important subjects with which 
the Legislature has dealt These are Stock Exchange 
transactions, marine insurance, and insurance upon lives 
or other events. 

The first of these subjects was dealt with by Sir John 
Barnard's Act, 7 Oeo. II. c. 8, which was more particularly 
directed to wagers on the price of stock, or, as they are 
sometimes called, '^ agreements to pay differences." These 
originate in some such transaction as this: A contracts with 
X for the purchase of fifty Russian bonds at £78 for every 
£100 bond. The contract is to be executed on the next 
settling day. If by that date the bonds have risen m price, 
say to £80, X, unless he has the bonds on hand, must buy 
at £80 to sell at £78; and if he has them on hand, he is 
obliged to part with them below their market valua 
[*179] If, on the other hand, the bonds have gone down *in 
the market, A will be obliged to pay the contract 
price which is in excess of the market value. 

It is easy to see that such a transaction, may be made the 
medium of purely wagering speculations; that A may 
never intend to buy nor X to sell the bonds in question; 
that they may intend no more than that the winner should 
receive from the loser the difference between the contract 
price and the market value on the settling day. And yet 
such a payment of differences may be perfectly bona Jtde; 

a. nidi ▼. JoBM. b B. a B. MB. 

1 This would not be the role in this oonntry, where wagen aiegenfls^ 
ifllj held iUegaly and frequently so independent of stutatSi See p, 17S. 



Gtep. T. (1. LEGALITY OF OBJECT. S89 

A maj have found so much better an inyestment for his 
money between the date of the contract and the settling 
day that it is well worth his while to pay a difference in JT's 
favour to be excused performance of the contract 

Sir John Barnard's Act was repealed by 23 Vict a 38, 
and contracts of this nature, if proved to be simple wagers, 
fall under the 8 and 9 Vict. o. 109, § 18.« But it is hard to 
prove that they are so. The shares may be bought on the 
terms that they are not to change hands; then the transac- 
tion is a wager on their price at a future day.* But if the 
purchase is the result of one agreement and the payment 
of the difference is the result of another, it is impossible to 
say that either is a wager,^ and not easy to construct a 
wager by combining the two transactions.' 

m, Thb effect of 8 and 9 Viet e. 100, 1 18, upon Stook BzohAiige trmnnelioiis ii w«ll 
■amnuuiaed lii the Appendix to tho Report at the Stook BTnhei^t* OommiHioB, ISTI 
«ia7], p. 806. 

k Grixewood T. Blane, 11 0. R 68a 

a Tliecker ▼. Hardj, 4 Q. B. D. 887. 

^ Futures, as thej are called, have received the aeyere oensare of the 
American oourta. An agreement for a sale for future deliverj is a 
gambling contract, and as such not enforceable where the intentioii is 
that there shaU be no actual sale of property, but that only at the time 
fixed for deliyeiy the parties shall settle, and the purchaser ^j or re- 
ceiTe the differences between the agreed price and the market price al 
that time, according as the market price is less or greater. Such con- 
tracts are considered immoral, illegal and contrary to public policy. 
Gregory ▼. Wendell, 89 Mich. 887 ; Lyon y. Gulbertson, 88 Dl 88 ; Samp- 
son y. Shaw, 101 Mass. 145; Rnmsey ▼. Berry, 65 Me. 670; Kirkpatrick 
▼• Bonsall, 72 F& St. 165; Ckxskrell v. Thompson, 85 Ma 610; Whiteside 
V. Hunt, 97 Ind. 101; Irwin y. Williar, 110 U. S. 499; Kirkpatrick v. 
Adams, 20 Fed. R 287; Lowry y. Dillman, 69 Wis. 197; Bartlett y. 
Smith, 13 Fed. R 268. In Cunningham y. National Bank of Augusta, 
71 Qa. 400, it was held that such contracts were within the meaning of 
the statutes of the state against '* gaming,** which precluded a recoyery 
by a bona JUU holder upon an instrument executed upon a " gaming 
consideration.'' A contrary yiew is held in Shaw y. Clark, 49 Mich. 884 ; 
Third National Bank y. Harrison, 10 Fed. R. 248. 

If one of the parties intends a bona flde sale, the contract may be en- 
forced at his instance, though the other party may haye intended sim- 
ply a wagw on future prices. Williams y. Tiedemann, 6 Mo. App. 269; 
Pizly y. Boynton, 79 III 851; Whiteside y. Hunt, 97 Ind. 191; Gregory 



tM FORMATION OF OONTRACI. Fkut U 

Harine insurance. — Marine insurance is dealt with bj 
19 Geo. II, c. 37, the effect of which is to avoid all insur- 
ances on British ships or merchandise laden on board such 
ships unless the person effecting the insurance is interested 
in the thing insured. What is an insurable interest, that is 
to say such an interest as entitles a man to effect an insur 
ance, is a question of mercantile law with which we are 
not here concerned. 

Insuranee generally. — The subject of insurance genera 
ally was dealt with by 14 Geo. IIL o. 48, from which Act, 
however, marine insurance is excepted. The Act 
[*180] forbids insurances on the lives of any ^persons, or 
on any events whatsoever in which the person ef- 
fecting the insurance has no interest; it further requires 
that the names of the persons interested should be inserted 
in the policy, and provides that no sum greater tnan the in 
terest of the insured should be recovered by him. A cred- 
itor may thus insure the life of his debtor, and a lessee for 
lives may insure the Uves upon which the continuance of his 
lease depends.^ 

Life insurance differs firom other contracts of insur- 
ance. — But a policy of Ufe insurance differs in an impor- 
tant respect from a policy of marine or fire insurance. The 

V, WendeU, 89 Mich. 337. If the agreezuent contemplated aa actual 
purchase and deliyery of grain in the future, which one of the parties 
was to furnish by buying it in the market, the contract is valid. Story 
▼. Salomon, 71 N. Y. 420; Gregory y. Wattowa, 68 Iowa, 718; WaU v. 
Schneider, 60 Wis. 362; Hatch y. Douglass, 48 Conn. US. 

1 Wager poUcies upon marine risks haYe been sustained in this coinir 
try as Yalid at common law, though some courts have pronounced them 
Yoid as against public policy. Wager policies in life and fire insurance 
are generally condemned by the courts. The assured must haYe an 
" insurable interest ** in the risk or the policy is Yoid. Bliss on Life Ins. 
ch. 11; Wood on Fire Ins. 90; Stevens y. Warren, 101 Mass. 664; War- 
nock Y. Davis, 104 U. S. 775. For conflicting decisions on the validity 
of an assignment by one of an insurance policy, insured upon his own 
life, to one having no interest in the life of the assured, upon an agree- 
ment by the assignee to pay the assessments necessary to keep the policy 
in force, see Price v. Supreme Lodge E^ights of Honor, Texas Supreme 
Court, 86 Albany Law J. p. 83. 



Ctaf, y. § L LEQALITY OF OBJECT. 235 

latter are contracts of indemnity/ and if the insured re- 
covers the amount of his loss from any other source the 
insurer may recover from him pro tanto. ^^ Policies of in- 
surance against fire or marine risk are contracts to recoup 
the loss which parties may sustain from particular causes. 
When such a loss is made good aliundsj the companies are 
not hable for a loss which has not occurred ; but in a life 
poliey there is no such provision. The policy never r^era 
to the reason for effecting U. It is simply a contract that io 
consideration of a certain annual payment, the company 
will pay at a future time a fixed sum,^ calculated by them 
with reference to the value of the premiums which are to be 
paid, in order to purchase the postponed payment." 

Thus, though in a life policy the insured is required by 
14 Oeo. ni. c. 48, to have an interest at starting, that inter- 
est is nothing as between him and the company who are the 
insurers. " The policy never refers to the reason for effect- 
ing it.^ The insurer promises to pay a large sum on the 
happening of a given event, in consideration of the insured 
paying lesser sums at stated intervals until the happening 
of the event. Each takes his risk of ultimate loss, and the 
statutory requirement of interest in the insured has nothing 
to do with the contract And so if a creditor effects an in- 
surance on his debtor's life, and afterwards gets his debts 
paid, yet still continues to pay the insurance premiums, the 
fact that the debt has been paid is no answer to the 
*claim which he may have against the company. [*181] 
This rule has been established in Dolby v. The Lon- 
don Life Assuranee Company^ overruling OodeaU v. Bold- 
ero* in which Lord EUenborough had held that a contract 
of life insurance, like one of marine or fire insurance, was a 
contract of indemnity, and that it could not be enforced if 
the loss insured against had not in fact occurred. 

«. DArrBaT.TIbbttti,5Q. B. D.660. 

k Lftw ▼. London Indifputablo Life PoUqj Ooi 1 K. A J. flU 

& 15aB.a6Bw 

4fiMt^9a 



HI FORMATION OF CONTaACT. Put U 

01) Otmtneti which are made in Ireaeh of definite rvlee nf 
Common Law. 

Agreement to eommit a crime. — It is hardly necessary 
to state that an agreement to commit a crime or indictable 
offense would be made on an illegal consideration: bat it is 
difficult to find an instance which is not at the same time * 
breach of some statutory prohibition. 

To trade with alien enemies. — Again, a contract with 
an alien enemy is illegal and void, and is stated, in the lead- 
ing case upon the subject, to be void, not on any ground of 
public policy,* but because ^ it was a principle of the Com- 
mon Iaw that trading with an enemy without the king's 
license was illegal in British subjects." 

To commit a civil wrong. — The commonest form of con- 
tracts in breach of rules of Oommon Law is an agreement 
to commit a civil wrong.^ Thus in AUen v. Beeooue * an 
agreement in which one of the parties undertook to beat a 
man was held void. An agreement which involves the 
publication of a libel is in like manner void.* Agreements 
to commit a fraud upon a third party have not unfrequently 
come before the Courts. Thus in the case of MaUalieu v. 
Hodgeon^ a debtor making a composition with his creditors 
of 6«. &2. in the pound, entered into tt separate contract 
with the plaintiff to pay him a part of his debt in fulL This 
was held to be a fraud on the other creditors, each of whom 
had promised to forego a portion of his debt in considera- 
tion of the others foregoing theirs in a like proportion. 

& PoMiT.BaU,8T.&64a 
6. % Ler. 174. 

«L OUyY.Yates^iaAH.TI. 
A It Q. B. C8B. 

1 Clement's Appeal, 53 Conn. 464; McCall y. Capehart, 20 AU. 681 

Y. Hann, 16 Wend. 44; Commissioners of Ejiox Cow ▼. MoCbmb, 

St 820. The authorities are numerous in support of the propo- 

of the author. See Oreenhood on Pub. Poi, rules CUV, 

Hateme y. Horwitz, 101 N. Y. 470; Huckini y. Hniil^ 188 

McReynolds, 65 Iowa, 46L 



I: 



T. S L LBQ AUTY OF OBJECT. S87 

" Where a creditor in fraud of the agreement to accept the ^ 
composition stipalates for a preference to himself, his stipu- 
lation is altogether void.'' 

•Thus too where the plaintiff purchased from the [*188] 
defendants an ezdusive right to use a particular scien- 
tific process, and it turned out that they had no such exclusive 
right as they professed to sell, it was held that the plaintiff 
oould not recover, because, upon his own showing, it ap- 
peared that he had purchased this right in order to float a 
oompany from which he expected to make a profit by de- 
frauding the shareholders.* 

Fraud and illegality. — It is worth noticing here a difii- 
culty sometimes introduced into this part of the law of con- 
tract arising from a confusion of illegality with fraud. 

Frand ia u. Aim'l wrnng^ anH ttn ngrftAmflnt tn ftnmTnit. a 

fraud is an agreement to doj^n illegal act. But fraud as a 
civil wrong must be kept apart from fraud as a vitiating 
element in contract. Fraud may vitiate a contract for a' 
reason other than the fact that it constitutes a civil wrong: 
as between the parties to a contract thfl, Jr a ud pf oiio pro 

Vftnfj f.liA fflUflfiU^^ ^^ ^^'^ nfliAr frr^m KAing gfi]^^inff If the 

fraud is discovered and the discovery acted upon in time, 
the contract can be avoided, not because the fraud is an 
illegality, but because the consent of the defrauded party 
was unreal : if the contract has been executed, the defrauded 
party must rely upon his remedy in tort and can sue for 
damages for the wrong he has sustained. But as between 
the parties to a contract, while still executory, the fraud 
of one affects it because the consent of the other is not gen- 
uine. 

Wfi^may say then that if .1 is ind uce d to en ter into a 
yntraist with Thy tha fmiirj ^f ^ the pnTitrfl.At. \n ^mutithU^ 
because A'^ nff^sftnt ia nnt gftiininft Tf A..9XA Z.'ksiSAA 

eontTiLfit th<% nhjAPt. nf ^^hinh \i^ tg dftfrMlUf t^** .Contract. 
jB tOK^ , because A a nd X have D>greed to do what is illegal 

▼. riM^ptetoScwaoCo. U & log. & 4HL 



t88 FORMATION OF OONTRACT. Fkrt U, 

The subject* would be mnch obscured if we allowed our- 
selveB to oouf use reality qf conaerU with legality qf ob- 
ject. 

[*183] (iii) ContraeU which are made in breach ofihepdUcy 

qfihe law. 

Public policy — General application.— The policy of the 
law, or public policy, is a phrase of frequent occurrence and 
somewhat attractive sound, but it is very easily capable of 
introducing an unsatisfactory vagueness into the law. It 
would be difficult to find its earliest application; most likely 
agreements which tended to promote litigation or to re- 
strain trade or marriage were the first to elicit the principle 
that the Courts would look to the interests of the public in 
giving efficacy to contracts. Wagers, while they contmued 
to be legal, were doubtless a frequent provocative of judi- 
cial ingenuity on this point, as is sufficiently shown by the 
case of Gilbert v. Syhee* quoted above: but it cannot be 
said with confidence that the doctrine of public policy 
originated in the endeavour to elude their binding force. 
Whatever may have been the origin of the doctrine, it waA 
applied very frequently, and not always with the happiest 
results, during the latter part of the last and the commence- 
ment of the present century.^ Modern decisions, however, 
while maintaining the duty of the Courts to consider the 
public advantage, have tended to limit the sphere within 
which this duty has been exercised, and the modem view 
of the subject \s perhaps best expressed by Jessel, M. R : 
^' You have this paramount public policy to consider, that 
you are not lightly to interfere with the freedom of con- 
tract"* 

There are, however, some parts of this question of publio 
policy which can be definitely dealt with, and agreements of 

flb Smith on Oontr. Laot tL 

h. It BMt, 160. 

«L Edgerton ▼. Eail Brownlow, 4 H. L. a L 

4. Firlatioc Co. ▼. Smipmb, If B«. Ml. 



V. gt, LBQALITY OF OBJEOl. 238 

certain kinds are illegal, not as breaking express roles, bnt 
aa infringing established principles or tendencies of the law. 
We will endeavour to arrange them under a few conven- 
ient heads. 

Agreements tending to ir^ure the pvbUe eerviee. 

Sale of offices. — The public has an interest in the proper 
performance of their duty by public servants, and Courts 
of Law hold contracts to be illegal which have for 
their object the sale *of public offices or the assign- [*184] 
ment of the salaries of such offices. This principle 
was carried so far that in Card v. Hope ' a deed was held to 
be void by which the owners of the majority of shares in a 
ship sold a portion of them, a part of the consideration for 
the sale being a covenant that the purchaser should have 
the command of the ship at sea, and that in the event of 
his death the sellers would appoint on the nomination of 
his executors. The judgment proceeded not merely on the 
ground that the ship was in the service of the East India 
Company,* which hiEul been held equivalent to being in the 
public service, but on the ground that the public had a right 
to the exercise by the owners of any ship of their best judg- 
ment in selecting officers for it 

This is perhaps an extreme case. But there can be no 
doubt that the sale of the public offices is contrary to the 
rules of the Common Law, as it ia also subject to statutory 
prohibition,' on the ground that the public has a right to 
some better test of the capacity of its servants than the fact 
that they possess the means of purchasing their offices.^ 

Assignment of salaries.-r- On a somewhat different prin- 
ciple the same rule applies to the assignment of salaries or 

& t&Aaan. 

k BlAchf ord ▼. PreetoB, 8 T. R. 88. 

«L B A 6 Bdw. VL e. It; 48 G«o. m, e. Ul 

iHaU ▼. QftTitt, 18 Ind. 890; Thefford ▼. Hubbard* S3 Yt 440; Stroud 
Y. Smilh, 4 Hooflk (DeL)448; Qnj ▼. Hook, 4 N. Y. 449; Hoim y. Bjan, 
86Wik86S. 



FORMATION OF OONTBAOT. Ptort H 

pemdons.* ^ It is fit," said Lord Abinger in FoHerm. WetUj^ 
'^that the public seirants should retain the means of a de- 
cent subsistence and not be exposed to the temptations of 
poYerty.'^ And in the same case, Parke, B., lays down the 
limits within which a pension is assignabla ^' When a pen- 
sion is granted, not exclusively for past services, but as a 
consideration for some continuing duty or service, then, al- 
though the amount of it may be influenced by the length of 
service which the party has already performed, it is against 
the policy of the law that it should be assignable." ' 

•.8M.AW.14i. 

1 The anignment of his salary by a pablic officer before it beoomee due 
is against public policjr. Bliss t. Lawrence, 68 N. Y. 442; Bangs ▼. 
Dunn, 66 OaL 79; Beai Y.HcVicker» 8 Ma App. SOS. CofUra, State Bank 
▼. Hastings, 16 Wis. 7a 

'The publie 8erTiee.^The American conrts are TCiy jealous of any 
contract which in any way tends to interfere with the doe administra- 
tion of the public serrioe. 

(1) Lobbying eontraets have reoeiyed considerable attention, (a) Th^ 
are agreements to render senrioes in securing legislatiye action through 
personal influence with the public servants and through other objection- 
able and sometimes corrupt measures, (b) Such contracts, however, 
must be distinguished from agreements for purely professional services 
to be rendered openly, as the attorney or agent of another in the way of 
preparing papers, presenting evidence and submitting arguments before 
public bodies, committees or heads of departments of the government 
The latter dass of contracts are valid, whereas the former are void as 
against the policy of the law. As illustrations of objectionable lobbying 
contracts, see Trist v. ChUd, 81 WaU. 441 ; Mills v. Mills, 40 N. T. 474; 
Tool Co. T. Norris, 8 WalL 46; McBratney v. Chandler, 88 Kan. 688; 
Frost V. Belmont, 6 Allen, 168. 

As illustrations of valid contracts for professional services, see Wylie 
V. Cox, 16 How. (U. a) 416; Stanton v, Embrey, 98 U. a 648; Taylor v, 
Bemiss, 110 U. a 48 ; Sedgwick v. Stanton, 14 N. Y. 889; Workman v. 
Campbell, 46 Mo. 806. 

(8) Contracts to procure administratlre action.— There is some con- 
flict r^;arding contracts whereby one agrees, for a compensation to be 
rendered, to procure from the heads of departments of government a 
contract in another's favor. The New York courts sustain such agree- 
ments, unless oorrupt measures are contracted for or resorted to. How* 
land ▼. Coffin, 47 Barb. 668; Lyon v. Mitchell, 86 N. T. 886; Southard 
V. Boyd, 61 N. Y. 177; but the United States supKems oonrt has held to 



T. S L LEGALITY OF OBJECT. 24' 



Agr^mnenU whush tend to pervert the eaurae qfjustioe. ^. 

Stifling prosecutions.— These most oommonly appear m 
the form of agreements to stifle prosecutions, and we can 

tiMOontniy. ToQlOo.T.Norrl8,3WaU.46; Oscanyany. ArmsCo. 108X1, 
a 961 ; Elkhart Co. Lodge y. Crary, 08 Ind. 288. Unless some improper 
meaBures are contemplated, no wrong can oome from such contract 
where aU parties, the gOTemment officers, the principal and his agent, 
folly understand the relation of each to the subject-matter of the trans- 
action. The wrong which the courts strike down is the fraud practiced 
by a person's attempting to exert his influence with the administrative 
agents of the goremment and give apparently disinterested advice, 
wheress he is in fact the person chiefly interested in the success of his 
undertaking. Disclose his interest and the matter becomes simply a 
business transaction between the government and the agent of another, 
which cannot be objectionable. 

(8) Contracts to induce corporate action.— Contracts to influence 
municipal and quoui public corporations to locate their buildings or per- 
form some other corporate act liave frequently come before the courts. 
Such corporations are considered, to a certain extent, as servants of the 
pabliob and therefore are granted large privileges by the state. In view 
of this fact, the courts insist that tliey shall enter into no obligation that 
may, in any way, interfere with their serving public convenience. 

(a) If, under any contract with a corporation, the directors or agents 
of the corporation are to receive any secret and private advantage, then 
tiie contract is corrupt and iUegaL Fuller v. Dame, 18 Pick. 412; Bestor 
V. Hathin, 60 lU. 188; Linder v. Cairpenter, 62 lU. 800; Pacific B. B. Co. 
V. Seely, 46 Mo. 812. 

(b) Agreements to donate land or other property, contingent on the 
location of churches, academies and court-houses at a given point, or 
contingent on a railroad company constructing its road over a given 
route, liave generaUy been sustained. First National Bank v. Hendrie^ 
4S Iowa, 403; Cumberland B. R. Co. v. Babb, Watts, 468; McQure ▼. 
Ho. River B. B. Ca Kan. 878; Raibroad Co. v. Ralston, 41 Ohk> St 

With regard to the validity of oontracts, whereby A railroad company 
agrees to establish and maintain a station at a particular point on its 
line^ the decisions are in conflict, but it is believed that by weight of au- 
thority such contracts are valid, which do not restrict the company from 
locating a depot elsewhere, or from rendering any other accommodation 
which public convenience may demand. The LouisviUe, eta R. R. Co. 
V. Sonmer, 106 Ind. 66; Harris v. Roberts, 12 Neb. 681; Williamson v. 
Chioago» B. L eta 68 Iowa, 126; First National Bank of Cedar Bapida 
IS 



S48 FORMATION OF GONTRACI Fttt II 

hardly do better than adopt Lord Westbury's state- 
[*185] ment of the law in one of the *latest oases on the 

subject ^^ Yon shall not make a trade of a felony. 
If you are aware that a crime has been committed yon shall 
not convert that crime into a source of profit or benefit to 
yourself."* But the rule thus laid down must be taken 
subject to this qualification, that where civil and criminal 
remedies coexist, a compromise of a prosecution is permis- 
sible. ** We shall probably be safe in laying it down that 
the law will permit a compromise of all offences though 
made the subject of a criminal prosecution, for which of- 
fences the injured party might sue and recover damages in 
an action.* It is often the only manner in which he can 
obtain redress. But, if the offence is of a public nature, no 
agreement can be valid that is founded on the consideration 
of stifling a prosecution for it"^ 

m. WflllAma ▼. Bayley, L. B. 1 H. L. tM. 

k KeiTT. Leoinmn,6Q.B.S81;aiid8ee9Q.B.S0B. 

▼. Hendrie, 49 Iowa, 103; St Joeeph A Denver Ci^, eta ^ R. GOb ▼. 
Ryan, 11 Kan. 602; International R. R. Co. y. Dawson, S3 Tex. 300; 
Taylor ▼. Cedar Rapids R. R. Co. 25 Iowa, 871 ; Texas, etc. R. R. Ca ▼. 
Robards, 60 Tex. 549 ; Swartout t. Michigan Air Line R. R 24 Mich. 889. 

But subscriptions to railroad companies conditioned on their locating 
a depot at a given point have been held invalid in Holladay v. Patter- 
son, 6 Oregon, 182; Padflo R R Co. t. Seelj, 45 Ho. 313; Matih v. 
Fairburj, 64 lU. 414. 

iThe case of WiUiams ▼. Baylej has been frequently dted with ^h 
proval, and the principle involved is unquestioned. Town of Sharon v. 
Qager, 46 Conn. 189; McMahan v. Smith, 47 Conn. 222; Ormerod v. 
Dearman, 100 Pa. St 561; SchulU v. Culbertson, 46 Wis. 813; Pearos 
V. Willson, 111 Pa. St 14 ; Ricketts v. Harvey, 106 Ind. 564. By the sta^ 
utes of many states parties are permitted to compromise prosecutions for 
misdemeanors. Prosecutions are to-day in the name of the public and 
not in the name of some private person, as formerly. Private parties 
have the right to settle at any time their claims against each other; but 
if in part consideration of such settlement it is agreed that public pror 
ecution of some offense against the state shall be stayed, the agreement 
is void in toto, unless the statute authorizes such settlement. McHahan 
V. Smith, 47 Conn. 228; Reed v. McKee, 42 Iowa, 689; Partridge ▼. 
Hood, 120 Mass. 405; Malli v. Willett, 57 Iowa, 705; RoU v. Raguet, 4 
Ohio St. 400; Oxford National Bank v. Kirk, 90 Pa. Su 49; Atwood v. 



Cbftpb V. 8 1. LEGALITY OF OBJECT. B43 

Beferenee to arbitration. — Again, agreements to refer 
matters in dispute to arbitration are regarded as attempts 
to ^ oust the jurisdiction of the Courts," and are not neces- 
sarily enforced.^ Under the Common Law Procedure Act, 
1854,* the Courts have a discretionary power to stay pro- 
ceedings pending an arbitration, where there has been an 
agreement to refer an existing dispute. But when a con- 
tract contains a condition which provides that disputes aris- 
ing oat of it shall be referred to arbitration, the validity of 
sach a condition depends upon rather a fine distinction. 
Where the amount of damage sustained by a breach of the 
contract is to be ascertained by specified arbitration before 
any right of action arises, the condition is good;^ but 
where all matters in dispute, of whatever sort, are to be re- 

«. 17ftl6Vlot.e.l8S,Sll. 

ft. BoottT. Aveiy, 5 H. L. a 81L 

Fisk, 101 Maaa. 863; Schanner t. FarweU, 66 OL 642; Wheaton v. 
Ansley, 71 Ga. 86. 

^ Seott T. Arerj is regarded as a leading case and Is a departure from 
the doctrine, as formerly understood, that arbitration dausea in con- 
tracts are void. The case has been generally f oUowed in this country 
and the principle applied to contracts for the construction of buildings, 
railroads, canals and other works involving numerous details. These 
oontractB give rise to many questions which a court of law might rea- 
sonably send to a referee, and the parties may agree that such questions 
shaU be determined by an architect or engineer or by arbitrators, and 
that such determination, or a bona fide effort to obtain it, shaU be a 
oondition precedent to the right to bring an action on the contract, 
whereas, as stated in the text, an agreement to submit aU difference to 
arlatrators is void. D. & R Canal Go. v. Pa. Coal Co. 60 N. Y. S60; 
Holmes v. Bichet, 66 CaL 807; Smith v. Boston & M. R. R. 86 N. H. 
468; Berry v. Carter, 19 E:ans. 186; Hudson v. McCartney, 88 Wis. 846; 
Beedv. Washington Ins. Co. 188 Mass. 672; Denver & New Orleans 
Const Cow ▼. Stout, 8 Col 61. See Phoenix Ins. Co. v. Badger, 68 Wis. 
888; Menti v. Armenia Fire Ins. Co. 79 Pa. St 480; Hurst v. Litchfield, 
89 N. Y. 877. But it must be expressly stipulated that the award or de- 
terminatioa is a oondition precedent to the right of action on the con- 
tract, or the agreement to arbitrate will be of no effect Menti ▼. 
Armenia Fire Ins. Co. 79 F^ St 480; PhcBnlx Ins. Co. ▼. Badger, 68 
Wis. 968; Beed ▼. Washington Ins. Co. 188 Mass. 679^ Qeer ▼. Council 
Bln£b, 67 Iowa, 8Xt 



144 FOEl£A.TION OF OONTaACIL FtetIL V 

f erred to arbitrators and to them alone, Bach a condition is 
illegal The one impoees a c6ndit.on precedent to a right < 

of action accruing, the other endeayours to prevent any i 

right of action accruing at alL* 

Af^eemenU which tend to encourage litigation. 

The rules respecting maintenance and champerty are 

really based upon this consideration of public policy. It is 

not thought well that one should buy an interest in 

[*186] another's ^quarrel, or should incite to litigation by 

offers of assistance for which he expects to be paid. 

Maintenance has been defined to be ^^ when a man main- 
tains a suit or quarrel to the disturbance or hindrance of 
right" • 

Champerty is where '*he who maintains another is to 
have by agreement part of the land, or debt^ in suit." ^ 

•. Bdwarda t. Abenjron lu. SoeMgr, 1 Q. & D. OML 
ft. Oom. Dig. v^. ▼, p. 8Sl 

iln many of the American states the English doctrines rsgardiaf 
maintenance and champerty hare not been adopted, the ooorts finding 
them inconsistent with existing statutory proTisions, or holding, as in 
Bichardson ▼. Rawlind, 40 Conn. 671, that " there are snch broad dii- 
tinotions in the state of society between Oreat Britain and this coon* 
try, that the reasons which make a law against maintenance and 
champerty salutary or necessary there do not exist here." Stoddard v. 
Mix, U Conn. 28; Danforth ▼. Streeter, 28 Yt 490; Wright ▼. Meek, 8 
Iowa, 472; Bayard ▼. McLane, 8 Harr. (Del) 189; Bentinck ▼. FrankhOi 
88 Tex. 468; Schemp ▼. Schenk, 40 N. J. U 196; Hoffman t. Yallejo, 
450aL564. See Sherley ▼. Riggs, 11 Humph. (Tenn.) 68. In most states, 
howerer, the doctrines of the text are observed, and the principle that 
there must be something " vexatious in the maintenance," as held in 
Findon ▼. Parker, is generaUy followed. Ferine y. Dunn, 8 Johns. CSl 
MS; McCSaU ▼. Gapehart, 20 Ala. 621 ; ThaUhimer ▼. Brinkerhoff, 8 Cow. 
647; Commonwealth t. Dupuy, Bright (Pa.X 44. Hie defense of cham- 
perty or maintenance can be set up only when the agreement Is sought 
to be enforced, or title is to be made through it; it is no defense to an 
action that the prosecution of the cause is by reason of a champertooi 
or iUegal contract between one of the parties and a stranger to the suit 
Oottrtright Y. Barnes, 8 McGraiy, C C 80; Barnes y. Scott^ 117 U. & 



^Shap. V. § t LEGALITY OF OBJECT. M5 

Maintenance. — It seemed trae till lately to saj that the 
mere maintaining or assisting another person in a snit 
wonld not now avoid a contract entered into for such apar> 
pose, nnless there were something vexatious in the main- 
tenance. ^^ The law of maintenance/' says Lord Abinger in 
Findon v. Pwrker^ <*as I understand it upon the modem 
constmctionsy is confined to cases where a man improperly 
and for the purpose of stirring up litigation and strife en- 
oonrages others either to bring actions or to make defences 
which they have no right to make." But in the recent case 
of Brndlaugh t^. NewdegaU^ Lord Coleridge held it suffi- 
cient to constitute maintenance that the conduct of the de- 
fendant *^ tended to promote unnecessary litigation." The 
defendant had given a bond for the costs of a suit brought 
by one Clarke against the plaintiff to recover penalties due 
for voting in the House of Commons without having taken 
the statutory oath. The House of Lords decided' that 
though the plaintiff had incurred the penalty it was not 
payable to Clarke, and upon this ground the Lord Chief 
Justice held that the defendant had promoted unnecessary 
litigation and that his conduct amounted to maintenance. 

The case stands alone in modern times as a revival of the 
ancient severity of the law in respect of maintenance. 

Champerty. — But champerty, or the maintenance of a 
quarrel for a share of the proceeds, has been repeatedly de 
dared to avoid an agreement made in contemplation of it. 
Its most obvious form, a promise to sapply evidence or con- 
duct a suit in consideration of receiving a portion of the 
money or property to be recovered, was held illegal in 
8ta/nley v. Janes * and Sprye v. Porter.^ Its less ob- 
vious form, a purchase, out and out, *of a right to [*187] 
sue has been placed on the footing of an assignment 
of a chose in action, a matter with which we shall presently 

«. UK.* w.eai 
k 11 Q. a D. la 

«L BnMUMigliT.OUite,8AppbOi.ai 
ikT&AatL 



M8 FOBMAHON of OOVTEACL Ftet u 

Agreementi in rerira/imt qf trads^ 

Bestralnt of trade. — It is against the policy of the law 
that a man should deprive himself of the means of exer. 
cising his skill and earning his living. The trade of the 
country and the individual himself may alike be sufferera 
The law upon this subject would fill a considerable space, 
but it is enough for our present purposes to give the simplest 
fund most general rules to which it can be reduced. 

Bales regarding it. — (1) Consideration is required to 
support a promise in restraint of trade, even though the 
promise be made under seal Mallan v. May.* Indeed it 
was at one time thought that the Courts would inquire into 
the adequacy, as well as the existence of the consideration, 
but this has been settled not to be so since the case of 
HUohcock «. Coker » (1837).* 

(2) Until quite recently it w&s regarded as a settled rule 
that the restraint may be unlimited as to time, but must 
not be unlimited as to space.* A man might promise that 

«.llM.ftW.e6B. 

f ■ 

in ooDsideration that the other agrees to withdraw hia or her opposition 
to divoroe prooeedings Is void as against the policy of the law. Hamil- 
ton T. Hamilton, 89 UL 849; Gomstock ▼. Adams, 88 Kan. S18; Stouten- 
burg ▼. Lybrand, 18 Ohio St. 928; Viser ▼. Bertrand, U Ark. 968; 
Muckenborg ▼. Holler, 29 Ind. 189. 

iKeeler ▼. Taylor, 68 Pa. St 467; following liallan t. May; VHkfj t. 
Baomgardner, 97 Ind. 68. 

* Restraint of trade.— Beat t. Chase.— Prior to 1870 it was the gen- 
erally accepted doctrine in this country that a contract wherein one of 
the parties promised not to carry on a specified bosiness at any place 
within the state was void. Wright t. Ryder, 86 GaL 857; Taylor ▼. 
Blanchard, 18 Allen, 870; Lawrence t. Kidder, 10 Barb. 641; Chappel 
T. Brockway, 21 Wend. 167; Dunlop ▼. Gregory, 10 N. Y. 241; More 
T. Bennett, 40 GaL 261 ; Thomas ▼. Miles, 8 Ohio St. 274. During the 
past fifteen years this arbitrary rule has been materially modified if not 
entirely abrogated. As early as 1839, Bronson, J., said in Ghappel v. 
Brockway, 21 Wend. 162: " The restraint may extend far enough to 
afford a fair protection to the purchaser. How far this will be, must 
depend in a great degree upon* the nature of the trade or basiness to 



CShmp. Y. g 1. LEGALITY OF OBJIX:rr. 849 

he would never carry on a certain trade within ten miles 
of London and the promise would be good; but if he prom- 
ised that he would not carry on the trade anywhere for 
five years it would not be upheld.* In direct conflict with 
this rule and with the decisions based on it is the decision 
of Fry, J., in JiojisiUan v. HausiUan^ If this decision is 
apheld, the limitation in each case may be judged on its 
merits by the Court. 

«. iJlwpT. WhAataroft,16Eq.BgL 
k HOLD. 858. 

which the contract relaten.** This dictum, howeTer» had no immediate 
effect in changing the rule. * In Oregon Steam Navigation Co. v. Winsor, 
90 WaU. 67 (1873), a contract restraining one of the parties from running 
a steamer on any of the waters of the state of California was sustained. 
Bradley, J., said : " This country is substantially one country, especially 
in all matters of trade and business; and it is manifest that cases may 
arise in which it would involve too narrow a view of the subject to con- 
denm as invalid a contract not to carry on a particular business within 
a parucular state." In Deal v. Chase, 81 Midi. 490 il875), a contract not 
to carry on a publishing business within the state of Michigan was up- 
held as not being an unlawful restraint of trade. The case in the United 
States supreme court and Beal v. Chase have been followed in Diamond 
Match Co. V. Boeber, 85 Hun (N. Y.), 4226. See Garrison v. Nute, 87 
UL 215; Talcott v. Brackett, 6 Brad. (111.) 60; Oreenhood on Pub. PoL 
691. The rule is practically settled that what is a reasonable restraint 
must depend upon the nature of the business to which the contract r^ 
lates. As to the validity of a promise not to carry on a particular busi- 
ness within reasonable limits within the state there is no question. 
Arnold v. Kreutzer, 67 Iowa, 214; Bowers v. Whittle, 63 N. H. 147; Qill 
V. Ferris, 82 Mo. 156. And where there is no hmitation on the restraint 
as to territory the contract is void. Wiley v. Baumgardner, 97 Ind. 66, 
distinguishing Bousillon v. Rousillon; Thomas v. Miles, 8 Ohio St. 274; 
Dean v. Emerson, 102 Mass. 480 ; Curtz v. Gokey , 68 N. Y. 800, and cases 
cited in Oreenhood, Public Policy, rule 568. 

Corners in the market— Contracts to create what are called comers 
in the market, and, thereby, to control the prices of articles of commerce, 
such as oreadstuffs, fuel and other necessaries of life, are void as against 
the policy of the law. They are unlawful interference with the freedom 
of trade. Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. St. 174 ; Amot 
▼. Pittson & Elmira Coal Co. 68 N. Y. 658; Raymond ▼. Leavitt, 46 
Mich. 447; Sampson ▼. Shaw, 101 Mass. 145; Wright v. Crabbe, 78 Ind. 
487; Central Ohio Salt Co. v. Guthrie, 85 Ohio St 666; Craft ▼. McCon- 
ooghy, 79 UL 846; Fisher v. Bush, 85 Hun (N. Y.). 645. 



too FORMATION OF CONTBACT. Ptet IL 

[*189] *(3) The restriction as to space must be reasonable 
in the judgment of the Court Beyond this no defi- 
nite rule as to the extent of restriction permissible can be 
laid down. The cases since 1854 turning upon this point 
have been excellently summarised by Mr. Pollock.* 

g 2. ^ect qf lUegalUy upon Contract in which ii eiriiU. 

What Is the effect of illegality. — We now come to the 
second branch of the subject of Illegality io Contract^ its 
effect upon the validity of a contract The effect of Ille- 
gality upon the validity of contracts in which it appears 
must of necessity vary according to circumstances. * It may 
affect the whole, or only a part of a contract, and the legal 
and illegal parts may or may not bo capable of separation. 
The direct object of a contract may be the doing of an ille- 
gal act, or the direct object may be innocent though the 
contract is designed to further an illegal purpose. The 
parties may both be ignorant, or both be aware of the ille- 
gality which remotely or directly affects the transaction; 
or one may be innocent of the objects intended by the 
other. Securities may be given for money due upon or 
money advanced for an illegal purpose, and the validity of 
such securities depends upon various considerations. The 
most that can be done here to elucidate a very complex and 
lengthy branch of the law is to lay down some rules which 
will answer roughly, but it is hoped not inaccurately, the 
questions thus suggested. 

(i) When the contract ie divieible. 

Legal parts of contract to be severed if possible trim 
illegal. — Where the conthtct consists of several parts, sc 
that there are several promises based on several considers 
tions, the fact that one or more of these considerations it 
illegal will not avoid all the promises if those which were 
made upon legal considerations are severable from the others. 
•. Pollock, asa^td. 4 



Shap. Y. S a> LEGALITY OF OBJECT. 851 

This is an old role of law ezplioitlj laid down in 
Coke's Report,* ♦** That if some of the Covenants of [nM] 
an Indenture or of the conditions endorsed upon a 
bond or against law, and some good and lawful; that in 
this case the covenants or conditions which are against law 
are void ab initio^ and the others stand good." ^ 

The rule applies whether the illegality exist by Statute 
or at Common Law, though at one time the judges held 
differently, and fearing lest statutes might be eluded, laid 
it down that ^^ the statute is like a tyrant, where he comes 
he makes all void, but the common law is like a nursing 
father, makes only void that part where the fault is and 
preserves the rest." This distinction has however been 
held in several modem cases to be without foundation.' 

The most frequent illustrations of the general proposition 
are to be found in cases where a corporation has entered 
into a contract some parts of which are uUra vireSj and so, 
in a sense, unlawful In such cases it has always been held 
that ^^ where you cannot sever the illegal from the legal 
part of a covenant the contract is altogether void, but where 
you can sever them, whether the illegality be created by 

m, PlffOl*BCMe, Oo. Bepi H, 97. 

1 Erie Railway Go. t. Union Locomotive & EzpresB Co. 6 Vroom (N. 
J.), d4S; Stewart ▼. Lehigh VaUej R. B. Co. 88 N. J. L. 520; Ware t. 
Corxj, 67 Ala. 28S. The principle is perhaps more f requentlj applied 
to oontracts containing stipulations in restraint of trade. In Peltz t. 
Ei6bele» 62 Mo. 171, It was held that a contract not to engage in a par- 
ticular trade for a specified time *' in the city of St. Louis or at any 
other place " was divisible, and, as to the restriction imposed in St. Louis, 
WM not void as in restraint of trade. Dean ▼. Emerson, 102 liass. 480; 
Ibomas ▼. Miles, 8 Ohio St. 275. Contra, Moore ▼. Bennett, 40 Cal. 251. 
The distinction between malum prohibitum and malum in as is some- 
times appealed to in settling the divisibility of a contract In Bierbauer 
V. Worth it is held that any stipulation to perform an inunoral act 
would taint the entire contract and render it void in toto. 10 Bissell, 

a a 60. 

>8tate T. Findley, 10 Ohio, 61; Thayer t. Book, 18 Wend. 68; Looiaia 
V. Newhall, 15 Pick. 159. 



M3 FORMATION OF CONTBACr. Ptet BL 

statute or common law, you may reject the bad part and 
retain the good." * 

(ii) W^en the eontraet u indimstbU. 

Where there is one promise made upon several consider 
ations, some of which are bad and some good, the promise 
is wholly void, for it is impossible to say whether the legal 
or illegal portion of the consideration most affected the 
mind of the promisor and induced his promise. An old 
case which may be quoted in its entirety will illustrate this 

proposition. 
[*191] *The grounds of action were stated to be,* " That 
whereas the plaintiff had taken the body of one H. 
in execution at the suit of J. S. by virtue of a warrant di- 
rected to him as special bailiff; the defendant in consider- 
ation he would permit him to go at large, and of two 
shillings to the defendant paid, promised to pay the plaintiff 
all the money in which H. was condemned: and upon 
assumpsit it was found for the plaintiff: and it was moved 
in arrest of judgment, that the consideration is not good, 
being contrary to the statute of 23 II. 6, and that a promise 
and obligation was all one. And though it be joined with 
another consideration of two shillings, yet being void and 
against the statute in part it is void in alL" ^ 

•. Per Wniet, J.. In Pickering t. nfracombe Raflwaj, L. R S O. P. SSa 

TImm cases maj serre as an illustration of the proposition before ua, but It moat be 

borne In mind that Lord Cairns, In The Aahbury Carriage Co. v. RicKe^ L. a 7 H. L. 

068, has pointed out that contracts of this nature are Invalidated not so much bj the 

Wsgality of their object as by the incapacity of the corporation to bind itself by 

agreement for purposes beyond its statutory powers 
6. FeatherstOB ▼. Hutchinson, Cro. Ells. 199. 

iPilson y. Himes, 6 Pa. St. 452; 47 Aol Dec. 422; Bredin'B Appeal, 99 
Pft. St 247; Wisner v. B;i3deU, 88 Mich. 278; Clark ▼. Ricker, 14 N H. 
44; Sumner ▼. Summers, 54 Mo. 840; Raguet v. IU>\\, 7 Ohio, 76; St. 
Louis, JacksouTille, etc. R R. Co. v. Mathers, 104 III. 257; Saratoga 
Countj Bank ▼. King, 44 N. Y. 87. The general principle is that if part 
ci a consideration be merely t^otd, the contract may be supported bj the 
lesidue of the oonaideration, if good per $e, but if any part of the oon- 



Chi4>.y.Sa. LEQALTTY OF OBJECT. 808 

(ui) Wh&te the direct obfeot ie unlawful hut the itiUentian 

innocent 

Direct object being illegal^ the contract is TOld,-— 

Where the direct object of the parties is to do an illegal act 
the contract is void. It does not matter whether or no thej 
knew that their object was illegal, ^* ignorance of law ezcus- 
eth none." ^ 

Unless illegal intent be absent and the contract can be 
legally performed, — But the knowledge of the parties may 
become important if the contract admits of being performed, 
and is in fact performed in a legal manner, though a detail 
in the performance as originally contemplated by the par- 
ties would, unknown to them, have directly resulted in a 
breach of the law. In Waugh v. Morris ' the def endaa' 
chartered the plaintiff's ship to take a cargo of hay f ron 
TroQTille to London. The cargo was to be taken from tht 
ship alongside, and was intended to be landed at a whar« 
in Deptford Creek. Unknown to the parties an Order in 
Council had forbidden the landing of French hay.^ The 
defendant^ on learning this, took the cargo from alongside 
the ship without landing it, and exported it. The vessel 
was delayed beyond the lay-days and the plaintiff sued for 
the delay. The defendant set up the illegal intention as 
avoiding the contract, but without success. ^* We agree," 
said Blackburn, J., in delivering the judgment of the 
Court, " that where a contract is to do *a thing [*192] 
which cannot be performed without a violation of 
the law, it is void whether the parties knew the law or not 
But we think that in order to avoid a contract which can 
be legally performed, on the ground that there was an in 
tention to perform it in an illegal manner, it is necessary 

k Undwtt A83VIoto.70,Sra. Ck>]itagioi]8 DiMasea (Animals) Act, 1800. 

■ideratioii be iUegcUf it Titiates the whole. Cobb v. Gowdrey, 40 Verm. 

2S; Megnire t. Ck>rwixie, 101 U. S. 108; Widoe ▼. V7ebb, 20 Ohio St 481. 

iSeeQmnhood. Pub. PoL. rule 458- Favor ▼ PhiUvick. 7 N. H. 82flL 



864 FORMATION OF CONTBACT Pttt U 

to show that there was the wicked intention to break the 
law; and if this be so, the knowledge of what the law is 
becomes of great importance." 

Qy) Whers the direct object i$ innocent lut the intenficn un- 

lawfuL 

niegallty of object avoids an otherwise Innocent con- 
tract. — Where the object of a contract is innocent in itself 
but is designed to further an illegal purpose, the contract is 
void if both parties knew of the illegal purpose at the time 
the contract was entered into. 

There is nothing illegal in a loan of money or a supply 
of goods; but if these are known to be intended to further 
an illegal purpose, neither the money lent nor the goods 
supplied can form the subject of an action. The whole 
transaction is void.^ The law upon this subject rests mainly 

1 Cannan t. Brjce.^ As was said bj Bradley, J., in Hanauer t. Doane 
(infra), '* When to draw the precise line between the oaaes in which 
the vendor's knowledge of the purchaser's intent to make an unlawful 
Qse of the goods wiU vitiate the contract, and those in which it wiU not, 
may be difficult. Perhaps it cannot be done by exact definitiona. The 
whole doctrine of avoiding contracts for illegality and immondi^ Is 
founded on public policy ; " and he might have added the words of Bar* 
rows, J., " Public policy is an unruly horse." (2 Bing. S29.) 

1. Sales of goods.— The vendor of goods is entitled to payment tbong^h 
he may have known that the buyer intended to make an iUegal use of 
them. As a rule, he will not be deprived of this right of payment anless 
(a) it be made a part of the contract of sale that the property shaU be 
used for an unlawful purpose; or (b) unless the vendor does something 
beyond making the sale in aid or furtherance of the unlawful design; or 
(c) unless the iUegal act contemplated is such that no man ** having a 
knowledge of the design can remain neutral without being in a just 
sense a criminal himself. " Where the design is to violate the funda- 
mental laws of society, a positive duty of intervention may arise.** The 
weight of authority in America sustains these propositions, though there 
is much conflict in the decisions. Tracy v. Talmage, 14 N. T. 1S3, 815 ; 
Hanauer v. Doane, 12 Wall 842, 849; Michael v. Bacon, 49 Ma 474; 
Curran v. Downs, 8 Mo. App. 471 ; Rose v. Mitchell, 6 Col. 108; HOI v. 
Spear, 60 N. H. 268 (criticising Metcalf on Contr. 260); Gaylord t. Sora- 
gen, 82 Vt 110; Webber v. Donnelly, 88 Mich. 469; MoKinnej ▼. An- 



CShapw T. B Sl LEGALITT OF OBJECT. 259 

npon three oases which will furnish convenient illustrations 
of the mla The first of these is Cannon v. Bryce"^ (1819)) 
in which the assignees of a bankrupt sued for the proceeds 
of goods which they asserted to be a part of the bankrupt's 
property. The goods had been assigned by the bankrupt 
to the defendant in part satisfaction of a bond which was to 
secure to the defendant the payment of money lent by him 
to the bankrupt to meet losses arising from stock-jobbing 
transactions which were illegal under 7 Geo. 11. c. 8. It 
was held that the lending of the money, the bond, and the 

diefWB, 41 Tex. 868; Bickel v. Sheets, S4 Ind. 1 ; DeGroot v. Van Denzer, 
17 Wend. 170. Many contracts made during the late war for suppUes to 
be used by the Confederates in aid of the Rebellion came before the oourts 
of the Southern States, and the decisions were conflicting. See Oillam 
▼. Loon^, 1 Heisk. (Tenn.) %l^\ Boquemore v. Alloway, 83 Tex. 461. The 
question came before the supreme court of the United States in Hanauer 
T. Doane, 12 WalL 842, and it wss decided that no action could be main- 
tained on such contracts, on the ground that the vendor knew that the 
property was to be employed in the commission of a criminal act. 

Sl Loans of money.^ While the American courts have quite generally 
disapproved of Pearoe v. Brooks, cited by the author (see cases cited 
above), they have followed Cannan v. Bryce and McKinnell v. Bobinson, 
holding that one who loans money to another "/or the express purpose " 
of aooomplishing an illegal object, cannot recover his loan. Not that 
any legal distinction can be drawn between a loan of money and a sale 
of goods as affecting this question, but money is frequently, if not in the 
majority of cases, loaned to assist another in some undertaking ; and if 
the undertaking be illegal, as for instance a gambling transaction, the 
lender, knowing of the borrower's intention and assisting by way of a 
loan,wiU be deprived of his right to recover the money loaned. Culler 
T. Welsh, 48 K. H. 488; White v. Buss, 8 Cush. 450; Buckman v. Bryan, 
8 Denio, 840; Peck v. Briggs, 8 Denio, 107; Mordecai v. Dawkins, 9 
Rich. (S. C.) 262; 1 DanL on Keg. Inst 178; Williamson v. Bailey, 78 
Mo. 686; Gritoher v. HoUoway, 64 N. C. 526; Viser v. Bertrand, 14 Ark. 
267; Baymond v. Leavitt, 46 Mich. 447. 

In Howell v. Stewart, 54 Mo. 404, it was said that, " aside fnym fdonies 
or crimes involving great morcU turpitude^ the mere knowledge of the 
lender or vendor, that the money loaned or the property sold is designed 
to be applied to an unlawful purpose, will not prevent a legal recovery, 
based on such loan or sale." Lewis v. Alexander, 51 Tex. 678; L^on ▼• 
BeqMMi, 1 Litt. (Ky.) 188. 



859 FORMATION OF OONTRACT. P^it II. 

assignments nnder the bond (which were made after bank- 
ruptoj) were all alike void, and that the plaintiffs could r&- 
oover the proceeds of the goods. There was no doubt that 
the defendant knew the illegal object to which his money 
was to be applied; and Abbott, 0. J., in giving judgment, 
said, ^ Then as the statute has absolutely prohibited the 
payment of money for compounding differences, it 
[*193] is impossible to say *that the making such payment 
is not an unlawful act: if it be unlawful in one man 
to pay, how can it be lawful for another to furnish him 
with the means of payment I It will be recollected that / 
am speaking of a case wherein the means were furnished with 
a/tUl knowledge of the object to which they were to he applied^ 
and for the ea^ess purpose of accomplishing that object*^ 

The second case is McKinnell v. Robinson^ (1838). Here 
an action was brought to recover a sum of money lent, as 
the plaintiff knew, for the purpose of playing at ^^ Hazard," 
a game which, apart from 9 Anne, c. 14, is prohibited by 
12 Geo. IL c. 28. It was held that the plaintiff could not 
recover, on the principle '^ that the repayment of money lent 
for the express purpose of accomplishing an illegal object 
cannot be enforced." 

The third case is Pearce v. Brooks\ (1866). The action 
was brought by coach-builders to recover payment for the 
hire of a brougham engaged by a prostitute. Evidence was 
given that the plaintiffs knew the character of the defend- 
ant, and from this, and from the nature of the article sup- 
plied, the jury found that the plaintiffs knew that it was 
supplied for the furtherance of an immoral purpose. Upon 
this it was held that the plaintiffs could not recover. '' My 
difiBculty was," said Bramwell, B., " whether though the 
defendant hired the brougham for that purpose, it could be 
said that the plaintiffs let it for the same purpose. In one 
sense it was not for the same purpose. If a man were to 
ask for dueling pistols, and to say ^^ I think I shall fight a 

m. tM.ftW.4as. 
k L. & 1 Bzch. tU. 



Chap. V. g a. LEGALITY OF OBJECT. 267 

duel to-morrow," might not the seller answer, " I do not 
want to know your purpose; I have nothing to do with it; 
that is jour business; mine is to sell the pistols, and I look 
only to the profit of trade." No doubt the act would be 
immoral, but I have felt a doubt whether it would be ille- 
gal; and I should feel it still but that the authority of 
Cannan v. Bryce and McKinneU v. Hobinson concludes the 
matter." These words exactly indicate the distinc- 
tion between *this class of contracts and those de- [*194] 
scribed in (iii). It is not necessary that the parties 
to a contract prima faois innocent should bind themselves 
to adapt it to an illegal purpose in order to avoid it. It is 
enough that the one party knows the unlawful intent of the 
other, and knows that the contract is intended to be applied 
to carry it out. 

Pistinction where illegal act is passed. — But a loan of 
money designed to satisfy debts arising from a past illegal 
transaction is distinguishable from the cases just cited. In 
OtMnnan v. Bryce ' the statute had forbidden, not only stock- 
jobbing transactions of a certain sort^ but advances of 
money to pay debts arising from them: in the other two 
cases the illegality was still in contemplation when the con- 
tract was made. 

Thus in Pyk^a case * a loan of money intended to pay 
lost bets was held to be recoverable from the estate of the 
bankrupt borrower. "The mischief had been completed," 
said Jessel, M. B., "the illegal act had been carried out, 
before the money was lent. The money was advanced to 
enable the borrower to pay the debts which he had already 
made and lost, which seems to me an entirely different 
thing from a loan of money to enable a man to make a bet" 

And in a group of cases, of which the most recent is 
Bridger v. Savage^* it has been held that one who is em- 
ployed to make bets for another is liable, if the bets are 

«. SB. A Aid. 179; 7060. n. & a. 
ft. 8Ch.D.76«. 

«L 15Q.B. D. (aA.)a6a. 

17 



t68 FORMATION OF CONTBACT. Ptert JL 

paid, to pay over the money to his employer. This is am 
exteusioD of the principle laid down in Pyk^s com, because 
the consideration for the promise to pay money thas re- 
ceived was a commission of £5 per cent, on th^ winnings, 
and so the liability rested on a contract to make agree- 
ments which the legislature had rendered void * with a view 
to their discouragement. But it must be admitted that the 
decisions of recent years on cases arising out of wagering 
or speculative transactions leave the law on this subject in 
a somewhat unsatisfactory condition. 

[*195] *(v) • Wh^s the unlawful intention is an one tide Ofdy. 

Innocent party may avoid contract. — Where one of 

two parties intends a contract, innocent in itself, to fur- 
ther an iUegal purpose, and the other enters into the con- 
tract in ignorance of his intention, the innocent party may, 
while the contract is still executory, avoid it at his option. 
In Cowan v. MHJboum^ the plaintiff sued the defendant for 
breach of an agreement to let him a set of rooms. It ap- 
peared that the plaintiff intended to use the rooms for the 
purpose of delivering lectures which were unlawful, as be- 
ing blasphemous within the meaning of 9 & 10 WilL IIL 
0. 32. The defendant was not aware of the use to which the 
plaintiff meant to put the rooms at the time the agreement 
was made; and he subsequently refused to allow the plaint- 
iff to use them, though he did not at first allege the charac- 
ter of the lectures as the ground of his refusal It was held 
that he was entitled to void the contract, and was not bound 
to give his reasons.^ 

«. 6A9Vloto.lOQ,SlS> 

ftu L. B. t Ezoh. S80; and ne Claj t. Tatoa, 1 H. ft N. 7a 

> Where the intention of one of the parties to a contract is lawful and 
the contract is capable of being executed in a lawful manner, he ia en- 
titled to full benefits under the contract, whatever maj have been the 
secret intention of the other party. Pixlej v. Boynton, 79 Hi 851 ; Quirk 
▼. Thomas, Mich. 76, p. 179, n. 1. In O'Brien ▼. Brietenbach, 1 HUt. 
(K. Y. ) 804, a case quite like Cowan t. MUboum, cited in the tezt» it was 



Cb^iu y. 8 a. LBQALITY OF OBJECT. S53 

(vi) SeowritieB for money due on illegal traneaetione. 

Where a promise has been given to secure the payment 
of monej due or about to become due upon an illegal trans- 
action, the validity of such a promise is based upon two 
considerations : — 

a. Whether the transaction is illegal or void. 

p. Whether or no the promise is made under seaL 

Where the promise is given in the form of a negotiable 
instrument, a further question arises as to its value in the 
hands of third parties, and this is affected by the answer to 
the first of the considerations above stated. 

Distinction between ^MUegar* and ''void/'— There is a 
difference, not very easy to analyse but of considerable 
practical importance, between cases in which Common Law 
or Statute make an object illegal, and cases in which they 
oiake a transaction void. The distinction has been thus 
stated: ''A thing may be unlawful in the sense 
Hhat the law will not aid it, and yet that the law [*196] 
will not immediately punish it;"* but this dictum 
does not exactly describe the difference between the cases, 
inasmuch as it does not cover all the cases in which the dif- , 
ference exists. A bet upon a cricket-match, for example, 
is not punishable, but it is more than merely void, as has 
already been explained. 

The ''taint of illegality."— The effect of the difference 
is this, that in the one case the promise is regarded as given 
upon an illegal consideration, in the other upon no consid- 
eration at all; in the one case everything connected with 
the transaction is '^ tainted with illegality," ^ in the other, 

A. For BramwcD, B., te Oowsb t. MOboorn, L. R. S Bzch. 880i 
k F» OnilMn te FUter T. Bridges, S B. A a MS. 

held that the leesor was bound bj his lease, and that in case the lessee 
kept a bawdj-house, the lessor's remedy was nnder the statute against 
disorderly persons. The New York case is quoted approTinglj in Taj* 
.or's landlord and Tenant, aea SS1« 



MO FORMATION OF CONTBACT. Part IL 

collateral contracts arising out of the avoided transaction 
are under certain circumstances supported. 

Effect of contract being illegal. — In cases where the 
transaction is illegal, a promise under seal given to secure 
the paymont of money due upon it is void. This was de- 
cided in the case of Fisher v. Bridges • by the Court of Ex- 
chequer Chamber, reversing the judgment of the Court of 
Queen's Bench. The plaintiff sued the defendant upon a 
covenant to pay a sum of money. The defense was that 
the covenant was security for the payment of a sum of 
money due upon a purchase of land agreed to be sold for a 
purpose declared to be illegal by Statute.* The Court of 
Queen's Bench held that the defendant was bound, inas- 
much as there was nothing unlawful in a simple promise to 
pay money. The Court of Exchequer Chamber held that 
the illegality when proved tainted the subsequent promise, 
and that this was not a simple promise to pay money, but 
that it ^^ sprang from and was the creature of an Ulega) 
transaction." ^ ^ 

If a promise under seal would be void under these circum- 
stances, it is obvious that a parol contract, even if based in 
part upon some new consideration, would be void also. 

Negotiable instruments^ how affected by contract being 
Illegal. — In the case of negotiable instruments we have to 
consider not only the effect of the illegality as between 
the original parties to the contract, but its effect upon 
subsequent holders of the instrument. In these caseSi as 

fl. s. ft a en 
h. isG«o.n.&n. 

& No writing, seal or other solemnitieB in the formation of the con- 
tract wiU preclude the court from receiving oral evidence to show that 
the transaction waa iUegal and therefore void. The defense of iUegality 
is aUowed, not as a favor to or in the interest of either of the contract- 
ing parties, bat in the interest of the public. Lyon v. Waldo, 80 Mich. 
868; Parks v. HcKamy, 8 Head (Tenn.), 897; Wooden t. ShotweU, 23 
N. J. L. 465; Buflendeau t. Brooks, 28 CaL 841; Seidenbendsr ▼. Charles, 
4a A R. (Fa.) lot 



Caiap. Y. %2. LEGALITT OF OBJ£CI. Ml 

we have already *noticed, the ordinary presumption [*197] 
in favour of the holder of such an instrument does not 
exist. Upon proof of the illegality which tainted the m- 
Btmment in its inception, the holder is liable to have to show 
that he is a holder for value ; that is to say, that he gave 
consideration for the bill : and even then, if he can be proved 
to have been aware of the illegality, he will be disentitled 
to recover. 

Effect of contract being void. — Where the consideration 
i& not illegal but the transaction is void, a promise given to 
pay money due upon such a transaction is based upon no 
consideration at alL If made under seal it is binding, if by 
parol it is void. 

(a) On promise under seal. — Thus if a contract be en- 
tered into which is invalid for want of some necessary 
form, a covenant to pay money due upon a contract of this 
nature ib binding. Where a corporation borrowed money 
upon moi tgage without having first obtained the approba- 
tion of the Lords of the Treasury, they did what the Mu- 
nicipal Corporations Act^ declared to be ^'unlawful;" but 
having received the mortgage money and covenanted under 
«eal to repay it, they were held bound by their covenant. 
'^ Although the mortgage may be invalid, that is no reason 
why the corporation should not be liable upon their cove- 
nant to repay the mortgage money." * 

(b) On parol contracts. — So too in the case of promises 
of payment made in consideration of past illicit cohabita- 
tion, such promises are invalid if made by parol,^ not on 
the ground that the consideration is illegal, but because 
there is in fact no consideration at all. But a bond given 
apon such past consideration would be binding.' 

(c) On negotiable instruments. — Negotiable instruments 
;iven upon such consideration are, as between the original 

•.SAeWilLIV.&Ttt. 

h, Tmjnb T. Ifayor of Brecon, S H. A N. MIL 

«L BMumiont t. Baere, b Q. B. 481 

A AT«nlT.J«iiklni,10E«.sm 



m FOBMATION OF OONTRAOT. FwtilL 

partiM to them, yoid, for the reason just stated, that they 
are simple contracts in which the promise is made in con- 
sideration of a transaction which raises no legal obligatioa, 
and therefore cannot support it. Bat where the negotiable 
instrument has passed into the hands of a subse- 
[*198] qnent holder, such a holder is not affected ^by the 
fact that as between the original parties the promise is 
Toluntary. In Fitch v. Janssj* a promissory note was given 
by the defendant to X in payment of a bet made on the 
amount of hop duty in the year 1854. X indorsed the note 
to the plaintiff. The main question for the Court was^ 
** whether the plaintiff was bound on proof of the origin of 
the note to show that he had given cozi^sideration for the 
note, or whether it was for the defendant to show that he 
had given none.'' ^ 

^^ I am of opinion," said Lord Campbell, ^ that the note 
did not take its inception in illegality within the meaning 
of the rule. The note was given to secure payment of a 
wagering contract, which, even before Stat 8 & 9 Yict 
0. 109, the law would not enforce: * but it was not illegal: 
there is no penalty attached to such a wager; it is not in 
violation of any statute, nor of the Common Law, but ia 
simply void, so that the consideration was not an illegal 
consideration, but equivalent in law to no consideration at 
all" 

(vii) Can a man he rdi&oed from a contract which he hnm* 
to he wdawfult 

Illegality known at the time, no ground for avoidance.- * 

It remains to consider whether a party to an illegal coi 
tract can under any circumstances make it a cause of action 
We may lay down without hesitation the rule that a party 

tt. K. ft B. M6. 

^ tt had been held In a prevloiis cam, Atherfold ▼. Beud, 8 T. B. 610. that a wagw 
OB the Mnottnt of hop dutj was against public policy, becauae the evidence at the tHal 
would ezpoae to the worid the amount of public roTenue. 

iBmiw 178, note. 



Qu^ T. §3. LEGALTTT OF OBJECT. «ei 

to such a contract cannot come into a Court of Law and 
aak to have his illegal objects carried out; nor can he set 
up a case in which he must necessarily disclose an illegal 
purpose as the groundwork of his. claim.* The general rule 
is well expressed in the maxim, ^^ in pari delicto potior ett 
conditio defendentisJ^ 

But thcBc are some exceptional cases in which a man may 
be relieved of an illegal contract into which he has entered; 
cases to which the maxim just quoted does not apply. 
These *would appear to group themselves in two [*199] 
classes: (1) cases in which the plaintiff has been in- 
duced to enter into the contract under the influence of 
fraud or strong pressure; (2) cases in which, the contract 
being unperformed, money paid or goods delivered in fur- 
therance of it have been held recoverable. 

Unless plaintiff be not in pari delicto^ or a loens poen- 
itentiae remains. — The first class of cases are best illus- 
trated by the decisions in ReyneU v. Sprj/e* and Atkingon 
V. Denby.^ In the first case the plaintiff had been induced, 
by the fraud of the defendant, to make a conveyance of 
property in pursuance of an agreement which was illegal 
on the ground of champerty. He sought to get the con- 
veyance set aside in Chancery. It was urged that the par- 
ties were in pari delicto^ and that therefore his suit must 
fail; but the Court being satisfied that he had been induced 
to enter into the agreement by the fraud of th& defendant, 
considered that he was entitled to relief. ^' Where the par- 
ties to a contract against public policy, or illegal, are not 
in pari delicto (and they are not always so), and where pub- 
lic policy is considered as advanced by allowing either, or 
at least the more excusable of the two, to sue for relief 
against the transaction,^ relief is given him." ^ 

a, Bc8:bl0T. Fh<MphAto Sewage 00.U& 10 Q.B. 401. 

ft. 1 1). M. ft o. eeoi 

AOH.AN T»u 
A 1 D. IL ft Q. m. 

^ " The oppreeser and oppresBed are neyernpon a footing of equality." 
The parties are not m pari delieto, when an officer reoeiTea aecuritiet 



264 FORMATION OF OONTAACr. FaiiU 

The case of AtJdnsaii v. Deriby * is a peouliar onOi and ap 
pears almost to indicate an approach on the part of the 
Common Law Courts to the equitable doctrine of Undue 
Influence. The plaintiff, a debtor, offered his creditors a 
composition of ha. in the pound. The defendant was one of 
the creditors, and his acceptance or rejection of the offer 
was known to be certain to determine the decision of sev- 
eral other creditors. He refused to assent to the composi- 
tion unless the plaintiff would make him an additional 
payment of £50, in fraud of the other creditors. This was 
done: the composition arrangement was carried out, and 
the plaintiff sued to recover the £50, on the ground that it 
was a payment made by him under oppression and in fraud 
of his creditors. It was held that he could recover; and 
the Court of Exchequer Chamber, in affirming the 
[•200] judgment of the Court of Exchequer, said, ♦" it is 
said that both parties are in pari delicto. It is true 
that both are in delicto^ because the act is a fraud upon the 
other creditors; but it is not j^ar delictum^ because the one 
has power to dictate^ the other no alternative hut to sttbmit.^^ 

The second exception to the general rule may be stated 
in the words of Mellish, L. J., in Taylor v. Bowersy* al- 
though the principle there laid down may need to be some- 
what explained and qualified. 

While the illegal purpose is executory there is a locus 
poeni^ntiae. — '' If money is paid or goods delivered for 
an illegal purpose, the person who had so paid the money 

a. 6H. ft K. 778; ra A N. 981 

MQ. an. (a A.) 800. 

or monej colore officii, but in violation of law. Richardson v. Crandall, 
48 N. Y. 868. Where " one holds the rod and the other bows to it,** the 
parties cannot be in pari delicto. Tracy t. Talmage» 14 N. T. 109; 
Brooks T. Martin, 2 Wall. 81 ; McBlair ▼. Gibbs, 17 How. 237. Where 
a party has been induced to enter into an illegal contract through 
fraud, oppression, or under influence, he may have relief both in equity 
and at law. 1 Pomeroy*8 Eq. sec. 403; Curtis ▼. Leavitt, 16 N. T. 9; 
Knowlton r. OmgreBa, etc. 67 N. T. 632; White t. franklin Bank, 22 
nok.182. 



Gha^ Y. SZ. LEGALITY OF OBJECT. M6 

or delivered the goods may recover them back before the 
illegal purpose is carried out: but if he waits till the illegal 
purpose is carried out, or if he seeks to enforce the illegal 
transaction, in neither case can he maintain an action." 

It would seem necessary in the first instance to note a 
distinction for which there is no direct authority, though it 
appears to be a sound one, between money p^id in consid- 
eration of an illegal promise and money paid to effect an 
illegal object If A gives X £1,000 in consideration of X 
undertaking to blow up Westminster Abbey or to write and 
publish a series of defamatory notices of Jf, it is assumed 
that A could not recover that money though at the end of 
six months Westminster Abbey was unharmed or the notices 
unwritten, and though X had the money at his bankers. 
But if A were to place £1,000 to the account of X with a 
banker in order that X might buy dynamite to blow up 
Westminster Abbey, or purchase a share in the manage- 
ment of a newspaper with a view to the defamation of M; 
and if A changed his mind before the execution of the 
contract it is presumed that he might recover so much of 
the £1,000 as had not been spent on the illegal objects con- 
templated. 

To allow an action to be brought in the first of these 
cases would tend '' to enforce the illegal transaction," in the 
second case it would tend to prevent the illegal object from 
being carried out. 

Cases where Illegal purpose is effected by deposit. — But 
passing from a rule which it is only possible to illustrate 
^hypothetically, there is a class of cases in which [*201] 
money or goods may be wholly or partially intact in 
{he hands of one party to the contract with whom they 
have been deposited in order to effect an illegal object, and 
the question has arisen whether the illegal object may not 
be effected by the mere deposit of the money or goods, and 
before they have been spent on the object contemplated. 

In Herman v. Jeuchner^^ A agreed with X to go bail for 

•. i6aax>.ML 



866 FORMATION OF CONTRACT. Put Q. 

him for a speoified time if X would deposit the amonnt of 
the bail in jI's hands as an indemnity against his possible 
default, A undertaking to return the money at the expira- 
tion of the specified time. Before the time had expired X 
sued A tor the money on the ground that the agreement 
was illegal and that he was entitled to rescind it In a pre- 
cisely similar case* Stephen, J., had held that since the 
money was still in the hands of A^ and the recognizances 
had not been forfeited, the lootis poeniterUiae existed and 
the money was recoverable. But the Court of Appeal 
overruled this decision, holding that the illegal purpose was 
effected when the public lost '^ the protection which the law 
affords for securing the good behaviour of the plaintiff." 
For, as was said by Brett, M. R, " when a man is ordered 
to find bail, and a surety becomes responsible for him, the 
surety is bound at his peril to see that his principal obeys 
the order of the Court: but if money to the amount for 
which the surety is bound is deposited with him as an in- 
demnity against any loss which he may sustain by reason 
of his principal's conduct the surety has no interest in tak- 
ing care that the condition of Uie recognizance is per- 
formed." • 

A somewhat similar case is that In re Oreat Berlin Steam- 
hoot Company.^ X placed £1,000 to the account of a com- 
pany to give it a fictitious credit in case of inquiries, the 
money to be returned to X at a specified date. Some of 
the money was drawn out with bis authority, but after the 
date specified, and when the company had gone into liqui- 
dation, X demanded payment of the balance, on the ground 
that he had a right to revoke a fraudulent arrange- 
[*202] ment before it had been carried *out. But the Court 
held that '' the object for which the advance was 
made was attained ; as the company continued to have a 
fictitious credit till the commencement of the winding up; 

«. WQMmT.8tnigneU.7Q.aD.5tfL 
ft. lAQ.B.D.atp.66a. 
C»Gh.D. 610. 



Chap. V. § a. LEGALITY OF OBJECT. 267 

and that it was too late for the Appellant to repudiate the 
bargain and claim the money.'' 

Where Ulegai purpose Is not effeeted till expenditure.— 
The two oases above cited must be distinguished in princi- 
ple from two which I propose to cite, on the ground that 
in the latter the illegal purpose had not been effected, and 
the parties coald be restored to their original positions. 

The case of Taylor v. Bowers* arose upon a fictitious as- 
signment of goods to a third party with a view to defraud 
creditors. The defendant with knowledge of the circum- 
stances took a bill of sale of the goods from the assignee 
and afterwards, although the plaintiff demanded them 
back, caused them to be put up at auction and sold. Noth- 
ing had been done in respect of the fraud contemplated 
against tl^e creditors, and the plaintiff was held entitled to 
recover. It was laid down by the Court of Appeal that 
until an illegal purpose is carried out there is a locus poeni- 
tefUias for one who has contributed goods or money for 
such a purpose.^ 

. The case of Hampden v. Walsh * illustrates the same rule. 
The plaintiff and another person each deposited £500 with 
the defendant to abide the decision of two scientific men 
as to the shape of the earth; the decision went against the 
plaintiff, but before the money was paid over he claimed it 
back, and he was held entitled to recover it. He had re- 
pudiated the wager before the money had left the hands of 

tt.lQ.]I.I>.(aA.)IOO. 

k iQ.B.D.ias. 

^Trnjlor T. Bowers.— The principle laid down in Taylor t. Bowers 
has been repeatedly applied in this country. Mount t. Waite, 7 Johns. 
484; Skinner t. Henderson, 10 Mo. S06; Adams Express Co. t. Reno, 48 
Ma SOS; Gowan t. Gowan, 80 Mo. 472; Wheeler t. Spencer, 16 Conn. 
38; Shannon r. Banner, 10 Iowa, 210; House ▼. Kennedy, 46 Me. 04; 
Knowlton t. Congress, etc. 67 N. T. 618; S. C. 108 U. a 49; Bank ▼. 
Wallace, 61 N. H. 24. The more common illustration is where money 
is deposited with a stakeholder on a bet or game of chance. The de- 
positor may recover the money of the stakeholder if he demands it al 
i^y tune before it is paid orer to the winner. Id. 



268 FORMATION OF CONTBACT. FSu^D. 

the stakeholder, and the Court held, on the anthority o! 
several cases, that the 8 & 9 Yict. c. 109, § 18, did not de- 
prive a party to the contract, thereby rendered void, from 
repudiating the contract and recovering the money ad- 
vanced before it had been paid.* 

Exceptional cases. — There are two recent cases which 
create a carious exception to the right to revoke a void or 
illegal contract before its objects have been effected. The 
purport of these decisions would seem to be that if 
[♦203] A employs Xto make a void or even *an illegal 
contract, and X having made it would be subject to 
loss if he did not fulfill its terms, A is bound to enable J 
to fulfill those terms or to indemnify him for having ful- 
filled them. 

In Jiectd v. Anderson* a betting commissioner was em- 
ployed to make bets the nonpayment of which would have 
caused him to be turned out of Tattersalls. It was held 
that the employer could not revoke the employment after 
the bets were lost and before they were paid, but was bound 
to indemnify the person employed against payments made 
under this compulsion*^ 

In Seymour v. Bridge* an investor employed a broker to 
purchase shares for him according to the rules and practice 
of the Stock Exchange, and it is a rule of the Stock £x- 
3hange to enforce among its members, under penalty of 
sxpulsion, the fulfillment of contracts made in violation 
of Leeman's Act.' This act avoids contracts for the sale of 
tank shares made without specifying their number, and 

1. VtfMT ▼. HlnVm^n, 6 C B. tTl; Uartfa ▼. Hewion, 10 Ez. 717. 

•.18Q.B. D.(aA)77«L 

«. 14Q.B.D. 

d.iOA81Vlct.e.». ^ 

1 The conclosioDS, at least, which the author draws from Bead ▼. An- 
derson and Seymour t. Bridge, are not law in this country. An agent 
or broker cannot recover for his services, losses and disbursements in 
making and performing the illegal contract of his principal Irwin ▼. 
WiUiar, 110 U. S. 409; Ku-kpatrick t. Adams, 20 Fed. B. 287; Fveira 
T. Qabel, 89 Pa. St. 80; Gr^gaiy t. WendeU, 89 Mich. 897; QfMiihood, 
Fob. PoL role 119. 



€1i«9-^-§sl legalitt of OBJBCT. 2e9 

makes it a misdemeanour on the part of the broker to effect 
such a contract. Nevertheless Matthew, J., having found 
that the defendant was aware of the costom, held him 
liable to indemnify the broker for payments made in fulfill- 
ment of the contract. 

The result of these decisions is a strati^ one. For A 
may employ X to make an invalid contract by way of 
wager or sale, and if X would be subject to loss by not 
fulfilling the contract so made, as in the case of a betting 
eommissioner at TattersaUs or a broker on the Stock Ex- 
change, Xcan fulfill the contract and enforce payment from 
A. Thus a contract can be enforced if made by X with 
JVon behalf of A which if made by A with If would be 
mienforceable. The learned judges who decided Bead v. 
Anderson and Seymour v. Bridge have in fact laid it down 
that the employment of a man who finds it profitable to 
belong to a society which enforces invalid or illegal con- 
tracts will make such contracts enforceable, since the em- 
ployer cannot revoke and must indemnify. 

♦Oh thb iCBAKuro of thb tebms " von),'* " toidablb," [*204] 

AND '^ UKENFOBOEABLB." 

We may now, after considering the elements necessary 
to a valid contract, ask ourselves what we mean by the 
terms which denote the effect of the absence of one of 
these elements.^ 

iToid and ToidabK^In Beecher r. Marq. ft Paa B. M. Go. 4S 
Mich. 106, QooXej^ J., said : '« If it is apparent that an act is prohibited 
and declared Toid on grounds of general policy, we must suppose the 
legislatiTe intent to be that it shaU be roid to aU intents; while if the 
manifest intent is to gire protection to determinate individuals who are 
md puriit the purpose is sufflcientlj aooompllBhed if they are giren the 
liberty of aroiding it.** The term void is frequently used in the statutes 
In the sense of Ti^dable. Fuller t. Haabrouck. 46 Mich. &SL Upon this 
subject see TerriU t. Anchauer, 14 Ohio St. 80; State t. Bichmond, M 
N. H. 383; Kearney t. Vaughn, (M) Mo. 284; VanShaack t. Bobbins, 8S 
Iowa, SOI; Inakeep t. Leoony, 1 N. J. L. Ill; Bromley t. Goodrich, 40 
Wis. 181; Brown t. Brown, 60 N. H. 688; Allis t. BUlings, 6 Met 
i.)416. 



rO FOBMATION OF OONTBACT. FftrC U 

By ^ void " we mean, destitute of legal effect 

By ^' voidable ^ we mean, capable of being aflbmed or 
rejected at the option of one of the parties. 

By '^ unenforceable '' we mean, valid, but incapable of 
proof pending the fulfillment of certain conditiona 

But it seems at first sight as if the word void was capable 
of bearing two meanings, one of which might apply to a 
contract not wholly destitute of legal effect. 

Nullity may be patent or latent. — We say that a con* 
tract is void on the ground of mistake, or by the operation 
of the Infant's Belief Act; yet if mistake or infancy be 
not pleaded to an action on the contract the parties would 
be held to be bound. Is then such a contract void! 

In fact it is just as void as one in which the acceptance 
differs in terms from the offer, or one which has for its 
object something manifestly illegaL For some causes of 
nullity in contract are obvious, some are latent. A plaintiff 
who claims under an alleged promise which he did not 
accept in the terms in which it was offered, or which is 
gratuitous yet not under seal, or which bears an illegal 
object on the face of it, cannot even put the defendant on 
his defence: but if he claim under a promise made by an 
infant to buy goods, or made under such mistake as invali- 
dates contract, there is nothing on the surface of the trans- 
action to show its nullity. Yet it is void if the defendant 
choose to prove it so, and, if he do not, his neglect to use 
the forms of procedure does not alter the character of the 
transaction. 

But if the defendant in these cases may at his option 
avoid the contract or let it stand, there would seem 
[*205] to be a *certain unreality in the distinction between 
void and voidable contracts. 

This is not so. When the nullity of the contract becomei 
apparent the whole transaction falls to the ground. It is 
incapable of affirmation, nor can third parties bona fids 
acquire rights for value under it: whereas in voidable con- 
tracts the party who has the option is not confined in the 



Caiap. y. g 3. LEGALITT OF OBJECT. 271 

exercise of his option to the use or neglect of forms of 
pleading. There is a contract though it is marked by a 
flaw, and he may say that he will affirm it in spite of the 
flaw. 

On the other hand he may lose his right to avoid it, either 
by his own conduct in taking benefit under it, or by the 
fact that innocent third parties have acquired rights under 
it. This could not occur if the contract was void. 

An illustration will show the essential difference between 
what is void and what is voidable: — 

(a) Contracts void. — A sells goods to JT, being led to think 
that X is Y; X sells the goods to M. The contract is void 
on the ground of mistake, and M acquires no right to the 
goods.* 

09) Voidable. — A sells goods to X, being led by the fraud 
of X to think that the market is falling. X resells the 
goods to M^ an innocent purchaser for value. M acquires 
a good title to the goods, and A is left to his remedy against 
X by the action of deceit.* 

In the first of these cases the complete nullity of the con- 
tract prevents any rights arising under it if the mistaken 
party choose to avoid it In the second there is a contract^ 
and one capable of creating rights, and the person defrauded 
has but a limited right to set it aside. 

Unenforceable. — A contract which is unenforceable can- 
not be set aside at the option of one of the parties to it: 
the obstacles to its enforcement do not touch the existence 
of the contract, but only set difficulties in the way of action 
being brought or proof given. 

8ach is a contract which fails to comply with the 
provisions *of the Statute of Frauds, and so cannot [*306] 
be proved ;- or a contract in writing which in default 
of the necessary stamp can only be given in evidence on 

a. Oaidj ▼. Ltednj, 8 App. Oa 4flS. 
ft. BftdeookT.lAWMa,4Q.B.D.aM. 



t72 FOHMATION OF CONTBACTT. Part IL 

payment of a penalty; or a contract which has fallen under 
the Statute of Limitations, and can only be revived by an 
acknowledgment in writing. The defect in such contracts 
is not irremediable, though except in the case of want of a 
stamp, it can only be remedied witii the concurrence of the 
party to be made liable 



PART IIL 

THE OPERATION OF CONTRACT. 

Wb oome now to deal with the effects of a valid oontraot 
when formed. And we have to ask, To whom does the ob- 
ligation extendi Who have rights and liabilities under a 
contract! 

And then this further question arises, Can these rights 
and liabilities be assigned or pass to others than the original 
parties to the contract? 

In the first instance we may lay down two general rules. 

(1) No one but the parties to a contract can be bound by 
it or entitled under it. 

(2) Under certain circumstances the rights and liabilities 
created by a contract may pass to a person or persons other 
than the original parties to it, either (a) by act of the parties, 
or (fi) by rules of law operating in certain events. 

These two rules seem at first to look like one rule subject 
to certain exceptions, but they are in fact distinct. The 
obligation binds only the parties to the agreement; but 
these parties, having created the obligation which binds 
them to one another, may in certain ways and under certain 
circumstances be replaced by others who assume their rights 
or liabilities under the contract. The rules may perhaps be 
made clearer by an illustration. 

(1) If John Doe contracts with Eichard Eoe, their con- 
tract cannot impose liabilities or confer rights upon John 
Styles. 

(2) But there are circumstances under which John Doe or 
Richard Eoe may substitute John Styles for himself as a 
party to the contract, and there are circumstances under 
which the law would onerate to effect this substitution. 

IS 



CHAPTER 1 

The Llxnlts of the ContracttLal Obligation. 

Contract cannot confer rights. — We may safely lay down 
the general rale that a person, who is not a party to a con- 
tract, cannot be included in the rights and liabilities which 
the contract creates so as to enable him to sue or be saed 
apon it This is not only established by decided cases, bat 
seems to flow from the very conception which we form of 
contract. A contract is an agreement between two or mors 
persons, by which an obligation is created, and those per- 
sons are bound together thereby. If the obligation takes 
the form of a promise by J. to X to confer a benefit upon 
JIf, the legal relations of M are nevertheless unaffected by 
that obligation. lie was not a party to the agreement H€ 
was not bound by the mnoidum juris which it created, and 
the breach of that legal bond cannot affect the rights of a 
party who was never included in it 

Or liabilities on a third party. — Nor, again, can liability 
be imposed on such a third party. One characteristic of 
the contractual as opposed to other forms of obligation con- 
sists in this, that the restraint which it imposes on individual 
freedom is voluntarily created by those who are subject to 
it, is, in fact, the creature of agreement. 

Trustee and cestui que trust. — The relation of principal 
and agent which forms an exception to the rule just laid 
down must form the topic of a separate chapter. 

A trust, again, has this in common with contract, that it 

originates in agreement, and that among its other objects it 

aims at creating obligations. If we could place a trust upon 

the precise footing of contract we might say that it 

[*209] formed *a very real and substantial exception to the 

general rule which we have laid down. There can 



1. 1 1. , UMITS OF CONTRACTUAL OBLIGATION 275 

be DO doabt that the creator of a trust and the trustee do, 
by agreement, bring rights into existence which a third 
party, the cestui que trust, may enforce. But it is better at 
once to set aside trusts from the discussion, and for this 
reason. Contract differs from other forms of agreement in 
having for its sole and direct object the creation of an 
obligation. The contractual obligation differs from other 
forms of obligation mainly in taking its origin in the vol- 
antary act of the parties obliged. A trust and the obliga- 
tions resulting from a trust correspond to neither of these 
characteristics. The agreement which creates a trust has 
many other objects besides the creation of obligations, these 
objects may include conveyance, and the subsequent devo 
Intion of property. The cbligation which exists between 
trustee and cestui que trust does not come into existence by 
the act of the parties to it. It is better therefore, having 
noted the similarities between the contractual and the fidu- 
ciary obligation, to dismiss the latter altogether from our 
inquiries. 

We may now proceed to illustrate the general proposition 
laid down at the commencement of this chapter: and it 
will appear from what has gone before that the proposition 
is susceptible of a twofold division. A man cannot incurr 
liabilities, and again, a man cannot acquire rights, from a 
contract to which he was npt a party. 

§ 1. ^ man cannot incur liabilities from a contract to which 
he was not a party. 

Contraet cannot Impose liability upon a third party. — 
This proposition is a part of a wider rule to the effect that 
liability ex contractu or quasi ex contractu cannot he im- 
posed upon a man otherwise than by his act or consent. * A 
cannot by paying X's debts unasked, make X his debtor; 
<« a man cannot, of his own will, pay another man's debt 
without his consent and thereby convert himself into m 
creditor." • 



OPERATION OF CX)NTBAGT. Part HI. 

And in like manner A and Jf cannot, by any con- 
[*910] tract into *which they may enter, thereby impose 
liabilities upon X. An illustration of this rale is 
afforded in the case of Sohmaling v. Thamlinaan.* The de- 
fendants in that case employed X, a firm of brokers, to 
transport a quantity of cocoa from London to Amsterdam. 
X agreed with the plaintiff to put the whole conduct of 
the transport into his hands, he did the work and sued the 
defendants for his expenses and commission. It was held 
that the defendants were not liable, inasmuch as there was 
no privity between them and the plaintiff; that is to say, 
that there was nothing either by writing, words, or con- 
duct to connect them with the plaintiff in the transaction. 
X was employed by the defendants to do the whole work 
for them, and there was held to be '' no pretence that the 
defendants ever authorized them to employ any other to do 
the whole under them: the defendants looked to Xonly 
for the performance of the work, and X had a right to 
look to the defendants for payment, and no one else had 
that right" 

But does a contract Impose a duty on third parties!— 
A contract then cannot impose the burdens of an obligation 
upon one who was not a party to it; nevertheless a con- 
tract does impose a diUyy upon persons extraneous to the 
obligation, not to interfere with its due performance. We 
use the term duty as signifying that necessity which rests 
upon all alike to respect the rights which the law sanctions, 
reserving the term obligation for the special tie which binds 
together definite and assignable members of the commu- 
nity. 

In Lundey v. Oye^ the plaintiff, being the manager of an 
opera house, engaged a singer to perform in his theatre 
The defendant induced her to break her contract. The 
plaintiff sued the defendant for procuring this breach, and 
the questions raised took the following fonn. It wis ar 

ft. t&Aasii 



Caiapw L § L LIMITS OF CONTRACTUAL OBUGATION. 877 

gfQod that an action would lie against one who proonred 
the breach of any kind of contract; but that if that were 
not so an action would lie, at any rate, for inducing a serv- 
ant to quit the service of his master.' 

Peculiar relations of master and servant.— It may be 
taken that the relations of master and servant have always 
been held to involve a right on the part of the 
*master to bring an action against any one who en- [*211] 
ticed away his servant, and so the Court was called 
upon to answer two questions: Does an action lie for procur- 
ing a breach of any contract? if not, then does the excep- 

> Lomlej T. Qje has been foUowed in Walker ▼. Cronin, 107 Maas. 655, 
cited approvingly in Dudley y. Briggs, 141 llass. 584; Haskina y. Roy- 
ster, 70 N. C. 601 ; Jones y. Stanley, 76 N. C. 855. In Walker y. Cronin, 
it was said that Dm principle of Lumley y. Gye applied to " aU oontracti 
of employment, if not to contracts of every description." In Jones v. 
Stanley, Rodman, J., speaking of the same subject said : '' The same 
reasons cover every case where one person maliciously persuades an* 
other to break any contract with a third person. It is not confined to 
contracts of servioo.** The cases of Rice v. Manley, 66 N. T. 82; Benton 
V. Pratt, 2 Wend. 885; Jones v. Blocker, 48 Oa. 821, and Burger v. 
Carpenter, 2 S. C. 7, have been dted as supporting the same doctrine. 
Not so, however, for fraud was the gist of the action in the New York 
cases, and the technical relation of master and servant existed in the 
othem. There i« no controversy over the proposition that an action wiU 
lie tat wrongf*illy enticing away another's servant or apprentice. 
Woodward v. Washburn, 8 Denio, 369; Bixby v. Dunlap, 56 N. H. 456; 
Noice V. Brown, 89 N. J. L. 569; Ames v. Union Railway Co. 117 Mass. 
541. The doctrine of Lumley v. Oye, or more properly of Bowen v. 
HalU is at least startling, and cannot be said to have been generally ac- 
cepted in th]8 country to the extent of applying it to contracts other 
than those for personal services. In Haywood v. Tillson, 75 Me. (1888), 
PcterB, J., in speaking of Lumley v. Oye, said : " A man may advise 
SDother to break a contract, if it be not a contract for personal services. 
He may tise any lawful influences or means to make his advice prevail. 
In eoch a case the law deems it not wise or practicable to inquire into 
the motive tliat instigates the advice. His conduct may be morally and 
not legally wr< mg. " See Pollock*s Torts, 456 ; Cooley's Torts, 279 ; 20 Am. 
Law Reg. N. S: 578, n.; Bigelow^s Cas. Torts, 806; 85 Albany Law J. 
p. 224, *' Boycotting,'* where the authorities on the liability of persons 
combining to induce parties to break their contracts are collected and 
<)onBdered. 



r8 OPERATION OF CONTRACrr. Ptotm 

tional rale applicable to the contract of master and servaat 
apply to the manager of a theatre and the actors ^om 
ke engages to perform! 

The majority of the Court answered both these qQestions 
in the afl3rmative. Coleridge, J., in an elaborate dissenting 
judgment answered both in the negative, holding that th« 
action "could not be maintained, because, first, merely to 
induce or procure a free contracting party to break his 
covenant, whether done maliciously or not, to the damage 
of another is • . . not actionable; second, that the lair 
with regard to seduction of servants from their masters' 
employ, in breach of their contract, is an exception, the 
origin of which is known,* and that that exception does not 
reach the case of a theatrical performer." 

The case stood alone from 1853 to 1881. In the latter 
year the case of Bowen v. HaU^ came before the Court of 
Appeal, offering precisely the same points for decision as 
Lundey v. Oye.* The majority of the Court, setting aside 
the question whether the relation of master and servant af- 
fected the rights of the parties, laid down a broad principle 
that a man who induces one of two parties to a contract to 
break it, intending thereby to injure the other, does that 
other an actionable wrong. 

From this decision Lord Coleridge, C. J., dissented, point- 
ing out that a malicious attempt to make A break his con- 
tract with X, if ineffectual, is not actionable, nor is an 
effectual attempt if not malicious; and that to make the 
right of action depend upon the motive of the attempt 
might lead to " dangerous and inexpedient inquiries for a 
court of justice." 

This decision of the Court of Appeal settles a question 

which, despite the case of Lumley v. Chye, must be 

*[*212] considered *to have remained open till 1881. A 

«. The exception which the Iaw of Master and SerraiiteeeiiiB to have cngmfled npoe 
Ike Oommon Law In thia matter ia traced by the learned Jndgek hi a detailed hkloftoal 
argument, to the Statutea of Labourera 

h.6Q.B. D.888. 

«L tX.AB.SIC 



Ckmp. LiZ. LIMITS OF OOlTnUCTXJAL OBUG ATION. S79 

oontraot oonfen apon the parties to it rights in rem as 
well as rights in personam; it not only binds together 
the parties by an obligation, but it imposes upon all the 
world a doty to respect the oontraotnal tie. 

%%^ A mum eannot acquire righU wider a eofUract te 
vfhich he ie not a party. 

Contract eannot confer rights on a third party. — This 
is a mle which admits of fuller illustration than the one 
which we have just been discussing. It is contrary to the 
common sense of mankind that M should be bound by a 
contract made between Xand A. But if A and JTmake a 
contract in which X promises to do something for the bene- 
fit of Mj all three may be willing that M should have all 
the rights of an actual contracting party ; or if A^ and a 
gronp of persons which we will, call X, enter into a con- 
tracty it might be convenient that M should be able to sne 
on behalf of the multitude of which X consists. 

Unless it amount to a declaration of trnst. — If A 
makes a promise to Xj the consideration for which is a 
benefit to be conferred on M by X, such a contract cannot 
confer a right of action on M. This is the inflexible rule 
of English Law, modified only by decisions which go to 
show that where X's promise amounts to a declaration of 
trust on behalf of M^ Uien, and not otherwise, if can sue: 
not under the contract but in virtue of the fiduciary rela- 
tion which it creates.^ 

1 Price T. EastOD«-7-Thi8 is certainly nol the inflexible role of the 
American ooorte. Much depends on the nature of the contract, and the 
role Is subject to Tarioas exceptions: 

FInL When the circumstances of the transaction are such that the 
actkm for money had and receired is proper, that is to say, whan the 
defendant has in his bands money which, in equity and good oott> 
soienoe, belongs to the plaintiff, it is no objection that there is want 
of priri^ between the parties to the action, or that the consideration did 
not moTe from the plaintiff. The law creates both the privity and the 
promiaa. HeUen t. Whipple, 1 Qray, 8S3; Lewis ▼• Sawyer^ 44 He. tSt; 



«0 OPERATION OF CONTRACT. Pan lU 

In Price v. Easton* the plaintiff sued n[K)n a promi84 
made by the defendant to JT that in consideration that ^ 
would work for him he would pay the plaintiff a sum of 
money. It was held by the Court of Queen's Bench that 
the plaintiff could not recover because he was not a party 
to the contract, the members of the Court stating in differ- 

Keen y. Sage, 79 Me. 140; Spencer t. Towlee, 18 Mich. 9; Taylor ▼. 
Taylor, 20 IlL 650; Uosford y. Kanouse, i5 Mich. 620. 

Second, Another exception is the one noted by the author on page 
218. The principle of Bourne y. Mason, that nearness of relationship be- 
tween the promisee and the person who is to take a benefit under the 
contract will g^ye such person a right of action, has been followed in 
some courts. Felton y. Dickinson, 10 Mass. 287 ; MeUen y. Whipple, 1 
Gray, 828; Exchange Bank y. Rice, 107 Mass. 42. 

Third. In Elxchange Bank y. Rice {supra), it was held that the gen- 
eral rule of law was as stated by the author, and that the recent decis- 
ions in Biassachusetts had tended to narrow the exceptions to it ; citing 
Field V. Crawford. 6 Gray, 116; Dow y. Clark, 7 Gray, 198. See Pipp 
y. Reynolds, 20 Mich. 88; Rogers y. Union Stair Co. 130 Mass. 583. In 
the states generally the exceptions haye been extended until" the rule 
practically ceases to exist. Under the code *'eyery action must be 
prosecuted in the name of the real party in interest, except,** etc. This 
proyision giyes the party for whose benefit a contract is made the 
right of action. Pomeroy on Remedies, sec. 139 ; Bliss on Code Plead- 
ing, 241. Independent of the code it is generally considered that the 
prevailing rule in this country is that a party may maintain assumpsit 
on a parol promise made to another for his benefit. Hendrick v. land- 
sey, 93 U. S. 143; Carnigie y. Morrison, 2 Met 402; HuU y. Marston, 
17 Mass. 676 (In Exchange Bank v. Rice, Gray, J., disapproves of the 
dicta found in the early Massachusetts cases) ; Brewer y. Dyer, 7 Cusb. 
837; Metropolis Bank y. Jersey City Bank, 19 Fed. Rep. 801; Sibley v. 
County of Pine, 31 Minn. 203; KimbaU y. Noyes, 17 Wis. 71; McDowell 
V. Laey, 85 Wis. 171; Farley v. Cleveland, 4 Cow. 432; Lawrence v. 
Fox, 20 N. Y. 270; Devol v. Mcintosh. 23 Ind. 529; Urquhart v. Bray- 
ton, 12 R. I. 169; Glen v. Hope Mutual Life Ins. Co. 56 N. T. 879; 
Bristow y. Lane, 21 111. 194; Bohanan v. Pope, 42 Me. 96; Hecht v. 
Caughron, 26 Ark. 132; Flint v. Cadenasso, 64 Cal. 83. It is held that 
the party to be benefited may recover, though the promise of defendant 
was under seal. Carter v. Mayor of Albany, 43 N. Y. 411; Kimball v. 
Noyes, 17 Wis. 721 ; McDowell v. Laev, 35 Wis. 171. Contra, MiUard v. 
Baldwin, 8 Gray, 484; Hinkley v. Fowler, 15 Me. 989. 



Gbap. I. S 2. LLMLTH OF CONTRACTUAL OBUQAHON. S8l 

ent forms the same reason for their deoisioiL Lord Den- 
man, C. J.y said that the declaration did not ^show any 
consideration for the promise moving from the plaintiff 
feo defendant" Littledale, J., said, ^^ No privity is 
shown between the plaintiff and the ^defendant." [*218] 
Tannton, J., that it was " consistent with the matter 
alleged in the declaration that the plaintiff may have been 
entirely ignorant of the arrangement between X and the 
defendant:" and Patteson, J., that there was ^^no promts 
to ths plaintiff alleged:' 

Near of kin to the promisee. — It was at one time thoaght 
that if the person who was to take a benefit under the con- 
tract was nearly related by blood to the promisee a right of 
action would vest in him. Bat this doctrine was finally 
overroled in the case of TweddU v. Atkinson* by the Ooort 
of Queen's Bench. 

The facts of that case were these. M and If married, and 
after the marriage a contract was entered into between A 
and Xy their respective fathers, to the effect that each should 
pay a sum of money to My and th€U Mshatdd haw power to 
9ue for 9%Ach sums. After the death of A and X, M sued 
the executors of X for the money promised to him. It was 
held that the action would not lie, and Wightman, J., said, 
^ Some of the old decisions appear to support the proposi- 
tion that a stranger to the consideration of a contract may 
maintain an action upon it, if he stands in such a near rela- 
tionship to the party from whom the consideration proceeds, 
that he may be considered a party to the consideration. The 
strongest of those cases is that cited in Bourne v. Masonf 
in which it was held that the daughter of a physician might 
maintain assumpsit upon a promise to her father to give her 
a sum of money if he performed a certain cure. But there 
is no modem case in which the proposition has been sup- 
ported. On the contrary, it is now established thai no 
stranger to the consideration can take advantage of a contraeif 
although made for his ien^/UJ' * 

k iVantr.C 



883 OPERATION OF OONTRACT. Part m. 

The doetrlne in equity. — Eqnitj was not always so an- 
hesitating as the Courts of C!ommon Law in the language 
used as to the rights of one who is to be benefited bj a con- 
tract to which he is not a party. 

The question has most frequently arisen in oases where 
contracts have been made or work done on behalf of 
r*214] a Company *which has not yet come into existence.^ 
The Company when formed cannot ratify such trans 
actions, and attempts have been made to bind it by intn> 
ducing into the articles of association a clause empowering 
the directors to fulfill the terms of the contract, or to repay 
those who have given work or advanced money to promote 
the existence of the Company. 

The Common Law Courts have uniformly held that no 
right of action accrues to the beneficiary under such a pro- 
vision.* In equity language has been used, sometimes very 
explicit, to the effect that " where a sum is payable hj A B 
for the benefit of O DjC D can claim under the contract as 
if it had been made with himself." * But recent decisions 
on this subject put the matter on a plain footing and dis- 
tinguish the cases in which a third party may or may not 
sue. 

In Eley v. Positvoe Oovemment Security Zif$ AMtirane$ 
Company f one of the articles of the association of the de- 
fendant Company provided that the plaintiff should be em- 
ployed as its permanent solicitor. The action was brought 
for a breach of contract in not employing the plaintiff. 

Lord Cairns, in delivering the judgment of the Court of 
Appeal, says,* *' Articles of association, as it is well known, 
follow the memorandum, which states the objects of the 
Company, while the articles state the arrangement between 
the members. They are an agreement inter sooiaa^ and in 
that view if the introductory words are applied to Article 

m, KebMTT. Baztar, L. R. t O. P. 174. 
ft. Melhado ▼. Porto Alegre Railway Oo.L.R.f a P. BOl 
«. Toooho ▼. Metropolitan Warehoudiig Ck>. Gh. fTl; SpHlar T. Hatia 
rOh.D.868. 
d. 1 Ex. D. 88 (0. JL). 
«L Sao AMhharr OarriaKO Oo. ▼. Kleba, L. B. 7 a L. at p. aiT. 



ChapbLiU LIMITS OF OOimtACTUAL OBUOATION. ' 283 

118, it becomes a oovenant between the parties to it that 
they will employ the plaintiff. Now so far as that is eon- 
cemed it is res inter alias aotOy the plaintiff is no party in it 
No doubt he thoaght that by inserting it he was making his 
employment safe as against the Company ; but his relying 
on that view of the law does not alter the legal effect of the 
articles. This article is either a stipulation which would bind 
the members, or else a mandate to the directors. In either 
case it is a matter between the directors and shareholders 
and not between them and the plaintiff." 

*An attempt was made in the case of the Empress [*215] 
£!ngineering Company^ to enforce an agreement 
made between A and X, wherein A professed to act on be- 
half of the Company, though it was not as yet formed. 
The agreement was subsequently introduced into its articles 
of association, but the Court of Appeal held that the trans- 
action gave no claim to X against the Company. 

Declaration of trust needed that third party may sue. — 
It may well be that an agreement between two parties may 
be so framed as to make one of them trustee for a third, 
and as was pointed out in the course of the argument by 
Jessel, M. B., some cases of this nature have created the 
impression that a third party who is to be benefited by a 
contract acquires rights ex contractu in equity; But a mere 
contract between two parties that one of them shall pay 
money to a third does not as a rule make that third person 
a cestui qtte trust. There must be some undertaking by one 
of the two contracting parties to stand to the third party 
in the relation of trustee to cestui qtie trust. 

And this distinction is well illustrated by two cases de- 
cided in 1883. In Murray v. Flavell ^ it was held that a 
clause in a contract of partnership which provided for the 
payment of an annuity, for five years after the determina- 
tion of the partnership, to the retiring partner or his widow, 
created a trust in favour of the widow which freed the an- 



•.ltOb.D.lS7. 
k»Ob.D.»L 



t84 OPERATION OF OONTRACT. Ftei ni 

nuity from the olaiins against her hmbaad's estate. On the 
other hand, in the case of the Ritheram Alum Co.^ where 
X employed the pUiintiff in the formation of the defendant 
Company and afterwards agreed with the Ck>mpany that it 
should pay the plaintiff for his services, it was held the 
agreement gave no right of action to the plaintiff. 

Attempts to enable a third party to sue for many joint 
eontraetors. — Attempts have been made, but without suo> 
cess, to break the general rule in the case of unincorporated 
companies and societies who wish to avoid bringing action 
in the names of all their members. To this end they intro* 
duce into their contracts a term to the effect that their 

rights of action shall bo vested in a manager or agent 
[*816] Such a case is that of ^Chray e. Pearmmf where 

the manHgers of a Mutual Assurance Company, not 
being members of it, were authorised, by powers of attor- 
ney executed by the members of the Company, to sue upon 
contracts entered into by them as agents on behalf of the 
Company. They sued upon a contract so entered into, and 
the Court of Common Pleas held that they could not main- 
tain the action, ^^for the simple reason, — a reason not ap- 
plicable merely to the procedure of this country, but one 
affecting all sound procedure, — that the proper person to 
bring an action is the person whose right has been violated." 
And Montagu Smith, J., said, ^^This is an attempt to do 
what has been frequently but fruitlessly attempted before, 
yiz. to get rid of the diflSculty of a large number of people 
suing in their own names, — to appoint a public officer with- 
out obtaining an Act of Parliament or a Charter of Inco^ 
poration." 

Statutory relaxations of the rule. — The practical in- 
convenience under which bodies of this description labour 
has been met in many cases by the Legislature. Certain 
companies and societies are enabled to sue and be sued in 
the name of an ii^dividual appointed in that behalf,* and 

•.SCb.D.101. 

kuasap-aai 



Cba;p. L S 2. LIMITS OF OONTRAOTUAL OBLIGATION. 281 

the Jadicatnre Act* has laid down a general role that — 
'^ Where there are numerous parties having the same intep- 
est in one action, one or more of such parties may sue or 
be sued, or may be authorised by the Court to defend in 
such action on behalf of all the parties so interested." 

Ageney postponed. — But although A cannot by contract 
with JT confer rights or impose liabilities upon Jliy yet A 
may represent JUj in virtue of a contract of employment 
sulxdsting between them, so as to become his mouthpiece 
or medium of communication with X 

•This employment for the purpose of representa- [*21T1 
tion is the contract of agency. The subject of agency 
is one to which it is somewhat difficult to assign a fit place in 
a treatise on the law of contract. It may be regarded as a 
mode of the Formation of contract, as a mode of extension 
of the limits of the contractual obligation, or as a special 
contract, a particular aspect of the contract of employment 
I prefer to regard it as an extension of the limits of con- 
tractual obligation by means of representation, but, since 
its treatment here would constitute a parenthesis of some- 
what uncouth dimensions, it will be better dealt with in an 
Appendix. 



paniai; 7 WDL IV. and 1 Vld o. 7S, reUting to oompaalM formed odOT lettan patanl, 
M and as Vict. o. 81, relatiiig to Trades Uniona; 88 and W Viet, a 80, reUtins to Frie&dli 
Soofetiea; and In many oaaea companies fonned by private Aets of Parilament posset 
similar atatutoiT poweia 
fli Older XIV. S 81 



CHAPTER IL 

The Assignment of Contract 

Wx now come to discuss the oases in which the oontraoi- 
nal obligation may pass to one who was not a party to the 
original agreement We have seen that a contract can- 
not affect any but the parties to it: but the parties to it 
may under certain circumstances drop out and others take 
their places, and we have to ask, first, how this can be 
brought about by the voluntary act of the parties themselves^ 
or one of them. 

§ 1. Assignment hy act of the partiee. 

This part of the subject also falls into two divisions, the 
assignment of liabilities and the assignment of rights^ and 
we will deal with them in that order. 

Assignment of liabilities. 

Liabilities cannot be assigned. — A man cannot assign hi« 
liabilities under a contract^ 

Or we may present the matter from the point of view of 
the other party to the contract, and say that a man cannot 
be compelled to accept performance of the contract from 
one who was not originally a party to it 

The rule seems to be based on sense and convenience. I4 
is not merely that a man is entitled to know to whom he is ti 
look for the satisfaction of bis rights under a contract; but, 
to use the language of Lord Denman in Hurnble v. Hunter,* 

«. IB Q. & S17. 

1 A debtor has no interest in debts owing bj him which he can trans- 
fer. Van Scotter y. Leffets, 11 Barb. 140; Jonas y. Walker, S Paine, C. 
G. 6S9; Cannon ▼. Kreipe, 14 Kan. 824 



Chap. IL § L THE ASSIGNMENT OF CONTRACT. 2»7 

Nyoa haye a right to the benefit 70a contemplate from the 
character, credit, and Bubstance of the person with whom 
yon contract'' 

An iUostration is supplied by the^ case of Sabsan A 
Sharps V. Drvmmond. * Shar^ let a carriage to the 
defendant at a *yearly rent for five years, undertaking [*319] 
to paint it every year and keep it in repair. Bobson 
was in fact the partner of Sharpe, but the defendant con- 
tracted with Sharpe alone. After three years Sharpe n»- 
tired from business, and the defendant was informed tha 
Bobson was thenceforth answerable for the repair of the 
carriage, and would receive the payments. The defendant 
refused to accept the substitution of Bobson for Sharpe, 
and it was held that he could not be sued upon the contract 
'^ The defendant," said Lord Tenterden, '^ may have been 
induced to enter into this contract by reason of the per- 
sonal confidence which he reposed in Sharpe. . . • The 
latter, therefore, having said it was impossible for him to 
perform the contract, the defendant had a right to object 
to its being performed by any other person, and to say that 
he contracted with Sharpe alone and not with any other 
personL'* 

Exeeptions to the rule. — There are certain limitations 
to this ride. A liability may be assigned with the consent 
of the party entitled ; but this is in effect the rescission, by 
agreement, of one contract and the substitution of a new 
one in which the same acts are to be performed by different 
parties.* 

Or again, if A undertakes to do work for X which needs 
no special skill, and it does not appear that A has been se- 
lected with reference to any personal qualification, Xcannot 
complain if A gets the work done by an equally competent 
person. But A does not cease to be liable if the work is 
ill done.^ 

Again, where an interest in land is transferred, liabilitiet 

a.tBL A Ad. 808. 

ft. I)lMr,FwtiMtoA0tloiis,88S. 

c Britfih WascoQ GOb ▼. Lea. 8 Q. B. D. ItfL 



188 OPERATION OF OONTIUCr. Part IIL 

attaohiirg to the enjoyment of the interest pass with it 
But this arises from the peooliar nature of obligations at- 
tached to land and will be matter for separate discussion. 

Asaignment t/f righU. 

(i) At OomcoH Law. 

Assignability of the benefit of a contract. — At Com 
mon Law, apart from the customs of the Law Merchant 
the benefit of a contract, or a chose in actianj cannot 
[*880] *be assigned so as to enable the assignee to sue upon 
it in his own name. He must sue in the name ol 
the assizor or his representatives; * or rather, the CommoL 
Law so far takes cognisance of such equitable rights as are 
created by the assignment that the name of the assignoi 
may be used as trustee of the benefits of the contract for 
the assignee. 

At common law only by substituted agreement.— The 
only mode by which the rights under a contract can be 
really transferred is not, strictly speaking, by assignment at 
all, but by means of a substituted agreement 

If A owes M £100, and M owes X £100, it may be 
agreed between all three that A shall pay X instead of Mj 
who thus terminates his legal relations with either party.^ 
Li such a case the consideration of A^b promise is the dis^ 
charge by M; for J/'s discharge of Ay the extinguishment 
of his debt to X; for X's promise, the substitution of A^u 
liability for that of M} 

•. F«nrlM ▼. Innet, 11 M. A W. la 

k FwLoitlTententoD, a J., Fairlte ▼. Doitoo, 8 a ft a 40QL 

I NoTstioB.— The case cited hj (he author is an instance of noTation; 
the substitution of a new agreement for an old one, whereby the orig- 
inal indebtedness is extinguished. See American Dunber Go. t. liul- 
crane, 55 Mich. 622; Finan ▼. Baboock, 5S Biich. 801; York ▼. Orton. 
65 Wis. 6; Foster ▼. Paine, 68 Iowa, 85; Parsons ▼. Tillman, 05 Ind. 458; 
Guichard ▼. Brande, 57 Wis. 584; McCiellan ▼. Kobe, 98 Ind. 808; G^eni 
T. Teasdale, 58 Vt 468. A oontraot of noration is not established nn- 
le« aU the parties affected bj it oonsent to the agreement Murpl^ v. 



Chap. H. 8 1. THE ASSIGNMENT OF CONTBAOT. 289 

In CMM of debt. — Bat there mast be asoertaiaed sums 
due from A to JIT and from JTto X; and it is farther ee- 
sential that there shoald be a definite agreement between 
the parties, for it is the promise of each which is the con- 
sideration for those given by the others.* Thos it is not 
enough that A shoald say to X '^ I will pay yoa instead of 
My^ and shoald afterwards suggest the arrangement to M 
and receive his assent 

Kor is it enough Miat JIT shoald in writing authorise A to 
pay to X the debt due from A to himself, and that A should 
write ^^acknowledged" at the foot of the document: X 
cannot sue A for the money. These were the facts in Lwh 
ersidge v. BroadhenU ^ M owed money to the plaintiff, who 
required security for his debt M thereupon, being owed 
money by the defendant, gave to the plaintiff a paper ao> 
thorising the defendant to pay the money to him (the 
plaintiff); this paper the defendant ^' acknowledged '' in 
writing; but on his being sued for the money, the Court of 
Exchequer held that such an acknowledgment gave no right 
of action. 

It will be observed that in neither of these cases was 
there such an agreement as amounted to a discharge 
by M of the ♦debt due to him from A; there was [*321] 
therefore no consideration for J.'s promise to pay 
X^ and on that ground X would be unable to maintain an 
action against A. 

a. Cttron ▼. Chadl^j, t & A a 69L 

Hanrahan, 60 WiB. 485; Lynch v. Austin, 51 Wis. 287; 1 F^ys. Gout 
870. And it must appear that the original indebtedness was extinguished* 
Jandon t. RandaU, 47 N. T. Super. Ct 874; Irwin y. Atkins, 7 HL App. 
17; Butterfield t. Hartshorn, 7 N. H. 845. The statute of frauds does 
Qot apply to a contract of novation. Mulcrane ▼. Amer. Lumber Ca 
55 Mich. 636, citing Dearborn y. Parks, 5 OreenL 81; Rowe t. Whittier, 
81 lie. 645; Pike y. Brown, 7 Gush. 181 ; Farley y. deyeland, 4 Cow. 
488; FUes y. McLeod, 14 Ala. 611; Bowen y. Kurtz, 87 Iowa, 888; Barker 
y. Bucklm, 8 Den. 45; Rice y. Garter, 11 Ired. 888; Bobbins y. Ajen» 10 
lfa688. 

IS 



890 OPERATION OF CXDNTRACT. Part m 

In the case last mentioned, Martin, B., thus gave reaBoni 
for holding that X could not recover: — 

'* There are two legal principles which, so far as I know, 
have never been departed from : one is that, at Common 
Law, a debt cannot be assigned so as to give the assignee a 
right to sue for it in his own name, except in the case of a 
negotiable instrument; and that being the law, it is per- 
fectly clear that M could not assign to the plaintiff the 
debt due from the defendant to him. . . • The other 
principle which would be infringed by allowing this action 
to be maintained is the rule of law that a bare promise 
cannot be the foundation of an action. • . • No doubt a 
debtor may, if he thinks fit, promise to pay his debt to a 
person other than his creditor; and if there is any consid- 
eration for the promise, he is bound to perform it But 
here there was none whatever. There was no agreement 
to give time, or tliat the debt of M ahotdd he extinguiahedi— 
no indulgence to him or detriment to the plaintiff. There 
was nothing in the nature of the consideration moving 
from the plaintiff to the defendant, but a mere promise by 
the defendant to pay another man's debt* 

It is thus apparent that a contract cannot be assigned at 
Common Law except (1) by an agreement between the orig- 
inal parties to it and the intended assignee, which is subject 
to all the rules for the formation of a valid contract, and 
which is limited in its operation to the transfer of a debt; 
or (2) by the rules of the Law Merchant under circum- 
stances to be noted presently. 

(ii) In Eqihtt. 

Asslgni^bility of contracts in equity. — Equity will per- 
mit the assignment of a cliose in actionj or the rights which 
a man possesses under a contract, whenever the contract 

is not for exclusively personal services; and a suit 
[*222] *in equity may be maintained by the assignee in his 

own name. 

m. Far Hvtln, B., UTenldc* ▼. BitMdbeBi, 4 R. ft N. Ua 



Caiap. n. 8 1. THE ASSIGNMENT OF CONTRACT. 291 

Is subject to certain conditions. — But certain conditions 
affect the rights of the assignee. 

(a) The assignment will not be supported unless consider^ 
ation has been given by the assignee. 

(fi) It will not bind the person liable until he has received 
thaticey although it is effectual as between assignor and as- 
sigpiee from the moment of the assignment. 

(f) The assignee takes subject to all such defences as 
might have prevailed against the assignor. In other words, 
the assignor cannot give a better title than he has got. 

These last two propositions require some illustration. 

I^otice. 

Notice* — It is fair upon the person liable that he should 
know to whom his liability is due. So if he receive no no- 
tice that it is due to another than the party with whom he 
originally contracted, he is entitled to the benefit of any 
payment which he may make to his original creditor. A 
convenient illustration is furnished in the case of covenants 
to pay interest on a mortgage debt If the mortgage be 
assigned by the mortgagee without notice to the mortgagor, 
and interest be afterwards paid by the mortgagor to the 
duly-authorized agent of the mortgagee, the money so paid, 
though due to the assignee, cannot be recovered by him 
from the debtor. We must put the case thus:' — Money is 
due at regular intervals from J. to X, and is ordinarily paid 
by J. to the agent of X: X assigns his interest in the debt 
to JT. A receives no notice but continues to pay the money 
to 2?s agent: the money so paid cannot be recovered by 21 
from J.. 

The Tisticmale of the rule is thus expounded by Turner, 
L J., in Stocks^ v. Ddbaon:^ — ^ The debtor is liable at law 

«. Wfllfaunt ▼. Sotrell, 4 VeM7, 881. 
fr. 4D.lLAa.l&. 

^B.— The rule that ** equitable titles have priority a^ 

*Vf of wfUoB,^ that as between saooeBaive paicha»' 

lie wfll have the prof erenoe who first gave 



|gt OPERATION OF COMTRACI. Part m. 

to the aarignor of the debt, and at law must pay the tj^ 
fignor if the assignor snes in respect of it If so, it foUowB 
that he may pay without suit. The payment of the debtor 

to the assignor discharges the debt at law. The 
[*228] assignee has no *legal right, and can only sae in the 

assignor's name. How can he sae if the debt has 
been paid! If a Court of Equity laid down the rule thai 
the debtor is a trustee for the assignee, without having any 
notice of the assignment, it would be impossible for a debtor 
safely to pay a debt to his creditor. The law of the C!ourt 
has therefore required notice to be given to the debtor of 
the assignment in order to perfect the title of the aeeignee.^ 
And the same case is authority for this further proposi- 
tion, that ^* equitable titles have priority according to the 
priority of notice." The successive assignees of an obliga- 
tion rank as to their title, not according to the dates at 
which the creditor assigned his rights to them respectively, 
but according to the dates at which they gave notice to the 
party to be charged. 

TiOe. 

Assignee takes subject to equities. — ^^ The general rule, 
both at law and in equity, is that no person can acquire s 

notioe to the debtor, eyen if he be a subsequent purchaser, has been fol- 
lowed l^ the United States supreme court and some of the state courts. 
Judson T. Corcoran, 17 How. 616; Ward y. Morrison, 25 Vt 608; White 
▼• Prentiss, 8 Mon« 610; Murdoch y. Dickson, 81 Mo. 188; In re QiUespie, 
16 Fed. Bep. 784; GLodfelt y. Cox, 1 Sneed (Tenn.), 880; Morrison y. 
I^rnch, 88 La. Ann. 611. Many of the American courts, howcYer, hold 
to the rule that equitable titles haYS priority ocsordtng to the priority 
ef tme; that the assignment of a chose in action is complete without 
notice to the debtor, so far as the rights of persons other than the debtor 
may be iuYol^ed; that the purchaser must abide by the case of thepeiiKm 
from whom he buys, and that he can take no rights which his assignor 
did not possess. Thayer y. Daniels, 118 Mass. 188; Muir y. Schenok, 8 
HiU, 888 (but see Bush y. Lathrop, 88 N. Y. 686); Moore y. Metropolitan 
Bant, 66 IF. Y. t\ {vnzreiai^ Hash y. Lathrop); Greentree y. Bosen- 
■Uick, 61 N. Y. 688; Summers y. Hubku^, iS Zar? 880; Newbmy y. Hill, 
8 Met (Ky.) 680; Eamena y. Huelbig, 88 N. J. Eq. 7b; Tii^la y, Ffat^ 
80W.Va.607. See, faYoring this Yiew, 1 Pan. oa Coot. 887i 8 j 
vox, Bq. Juris. 71< 716. 



Gbspw IL i L THB ASSIQNMENT OF CONTRACT. 291 

title, either to a chase in action or any other property, from 
one who has himself no title to it" And further, *' if a 
man takes an assignment of a chose in aetiony^ he most take 
his chance as to the exact position in which the party giv* 
ing it stands.'' ^ 

The facts of the case last cited will afford an apt illustra- 
tion of this proposition. 

Ji chartered half his vessel to X, using the other half 
himself, and taking half the risks of the adventure. The 
form in which the agreement between the parties was ex- 
pressed was this: — M and X executed a charter party 
whereby X appeared as sole charterer: by a second docu- 
ment a clerk of M undertook the payment of half the 
freight and half the risks of the adventure; and by a third 
document ilf guaranteed to X the performance by his clerk 
of the undertaking contained in the second document The 
whole arrangement was honafidsj and its peculiarities arose 
from the difficulty created by M being the charterer of a 
portion of his own vessel. 

'Subsequently M assigned the charter to J. for a [*224] 
large sum, without communicating to him the ac- 
companying documents which divided both the profits and 
the risks between the owner ilf and the charterer X A sued 
at Common Law in the name of M and recovered the whole 
freight^ the Court of Exchequer holding that X was bound 
on the true construction of the agreements to pay over the 
freight to Jf in the first instance, and afterwards settle the 
balance of profit and loss.^ X applied to the Court of 

•.CroaohT.OradttFonoier, L.B.8Q.B.880; ICuiglM ▼. IMzoa, S H. L. a TVu 
k Bojd ▼. ]l«nglfli» S Bz. Mc 

1 The doctrine thai the assignee of a non-negotiable chose in actioB 
takes it subject to aU equities is applied to three leading olanses of facts: 
FSist Gases wherein the equities are in favor of the debtor. Second. 
Osses wherein the equities arise between sucoessiTe assignees. Third. 
Osses wherein there are equities in favor of some third partj, who 
claims a right or interest in the thing assigned. The principle is applied 
to tfaa fiist dass of oases without question, but the other two give rise to 
whait an called *' latent equities." legavding which tha law is unsettled, 
8eep.S88^n.l;p. £M^n.l. 



S94 OPERATION OF CONTRACT. Part m. 

Chancery to have an aoooont taken in respect of the joint 
adventnref and to restrain A from proceeding on the Com- 
mon Law judgment. It was held by the Uoase of Lords 
that A must stand in the same position with Jf as to the 
whole agreement, that he was not entitled to more than a 
moiety of the f reight, and was liable for half the losses of 
the adventure.* 

In like manner, if one of two parties be induced to enter 
into a contract by fraud, and the fraudulent party assign 
his interest in the contract for value to X, who is wholly 
innocent in the matter, the defrauded party may get the 
contract set side in equity in spite of the interest acquired in 
it by X* 

This rale may be exclndcd by express terms. — It is 
possible, however, that two parties to a contract may stip- 
ulate that if either assign his rights under it, such an 
assignment shall be '^free from equities;" tl^at is to say, 
that the assignee shall not be liable to be met by such de- 
fences as would have been valid against his assignor.* It 
LB questionable, however, whether such a stipulation woold 
protect the assignee against the effects of Fraud, or any 
vital defect in the formation of the original contract. 

(iii) Bt Statute.* 

Assignment of contract by statute. — It remains to con- 
sider, so far as mere assignment goes, the statutory excep- 
tions to the Common Law rule that a c/iose in action is not 
assignable. 

«. MaoflrlM ▼. Dixon, 8 H. L. C. TUL 

Al Oraham ▼. Johnaon, 8 Eq. 88. 

t. Ex parte Aaiatlo Banking Corporation, f Gh. 887. 

1 In the American states choses in action are assignable bj statute, 
bat the statutes of the several states are so unlike in their terms that are- 
Tiew of the decisions under them would be out of place at this time. 
A few leading principles maj be stated which apply quite generaUj. 

1. What is assignable?— Frequently the right to transfer the legal 
Interest in a chose in action is not expressly given by statute, but in- 
directly by some provision affecting procedure, as authorising the as- 



Chapw IL § 1. THE ASSIGNMENT OF CONTRACT. 2M 

(«) The Jadicature Act of 1873 * gives to the assignee of 
any debt or legal chose in action all legal rights and 
remedies. *But (1) the assignee takes subject to [*225] 
equities; (2) the assignment must be absolute; (3) 
must be in writing signed by the assignor; (4) express no> 

ti|p[iee to bring the action in his own name, or requiring that suit shall 
be brought in the name of the real party in interest. Under such pro» 
▼iflions it has been held : 

IHrMt. That erery right of property which was assignable in equity 
and BurriTes to the personal representatives of the owner is assignable. 
Th« thing assigned must directly or indirectly involve a right of prop- 
arty. Cook V. BeU, 18 Mich. 887; Dayton v. Fargo, 45 Mich. 158; The 
LonisviUe, eta R. R. Co. v. Gk)odbar, 88 Ind. 218; Mulhall ▼. Quinn, 
1 Gray, 107; Grant ▼. Ludlow, 8 Ohio St 87; Hoyt ▼. Thompson, 5 
N. Y. 320. 

Second. As a general rule the right of action for a tort is not aasign- 
able, but such rights of action for torts as survive to the personal rep- 
resentatives may be assigned. An unliquidated claim for personal 
Injury, however, a merely personal wrong which does not survive on 
tha death of the person wronged, is not assignablsi Stewart v. Houston 
& Texas R. R. Co. 62 Tex. 246; BiUler v. NewaU, 20 S. C. 128; Dayton 
T. Fargo, 45 Mich. 153; Brush v. Sweet, 88 Mich. 674; Smith v. Sher- 
man, 4 Cush. 408; Meech v. Stoner, 19 N. Y. 26; Lattimore v. Simmons, 
13 Serg. & R. 188; Zabriskie v. Smith, 18 N. Y. 822. When the 
right of action arises out of the personal sufferings of the party 
wronged, mental or corporeal, it is not assignable. Actions for deceit, 
for breach of promise of marriage, for negligent injury to the person 
and malicious prosecution are of this class. Dayton v. Fargo, 45 Mich. 
158; Zabriskie v. Smith, 13 N. Y. 322; Ward v. Blackwood, 41 Ark. 295; 
Huff V. Watkins, 20 a C. 477; Sawyer v. Concord R. R. Co. 58 N. a 
517; Jenkins v. French, 58 N. H. 582; Clark v. Carroll, 59 Md« 160; 
Hannah v. Richmond, etc. R. R. 87 N. C. 851. 

ThirdL Parties cannot transfer their rights or liabilities arising out of 
an executory contract for personal service or involving personal trust 
and confidence. The right to compensation may be assigned after the 
service has been performed, but the right and duty to render the serv- 
ice cannot be. Chapin v. Longworth, 31 Ohio St 421; Griswold t. 
Carthage, etc R. R 18 Mo. App. 52; Palo Pinto County t. Gano, 60 
Tex. 249; Bethlehem v. Annis, 40 N. H. 84: Lansden v. McCarthy, 45 
Md. 106; Burger v. Bioe, 8 Ind. 126; Derlin v. The Mayor, eta 68 
N. Y. a 

FowrOi. While the aawnt of the debtor is not essential to the validity 
of an awigiiment^ still a creditor cannot assign a part of his daim 



«M opbrahon of oontracx Fvim 

tioe in writing mart be given to the party to be charge^ 
and the title of the assignee datee from notice. 

It is to be noted that the requirements of this section as 
to form are far more stringent than those of the Equity 
Coarts, which apparently did not reqoire writing either for 
the assignment or the notice. 

It should further be noted that the assignment operates 
without the consent of the party liable. In Brtoe v. Bw/^ 
niiter * the defendant received express notice of the assign- 

•.SQ.&D.60O. 

withoat the debtor't saBent, who has a right to pay the claim as a 
whole. ICandeTille t. Welch, S Wheat 877; Tripp t. Brownell, IS 
Cash. 883; Carter t. Nichols, 68 Vt. 558; Beardslejr ▼. Morgan, 78 Ma 
89; GetcheU ▼. Maney, 80 Me. 4i8; Philadelphia's Appeal, 86 Fa. 84. 179; 
MilM^ ▼. Spurr Mt. Iron Co. 48 Mich. 885. 

a Form of asslgDmeiit— A parol assignment good in eqnity is gen- 
sraUj good under the statutes. No particular form is required, and as 
between the parties to the assignment it need not be absolute, but may 
be conditional and by way of security. Draper t. Fletcher, 88 Mich. 
154; Heebstreet ▼. Beck with, 85 Mich. 08; 8 Schouler, Per. Prop. 878. 

a Motiee.— As between the assignor and assignee* and in order to 
complete the latter^s right to the thing assigned, no notice of the assign- 
ment need be given the debtor; but to protect himself against sub- 
sequent assignees and against payment or other acts of the debtor which 
might charge the claim with equities, the assignee should give the 
debtor, trustee or holder of the fund prompt notice of the assignment 
Judson ▼. Corcoran, 17 How. (U. a) 818; Farley's Appeal, 78 Pa. 8t. 48; 
Richards y. Griggs, 18 Ma 418; Bandall t. Beynolds, 58 N. Y. Super. 
C. 145; Van Keuren t. Corkins, 88 N. Y. 77: Stebbins ▼. Brace, 80 Ya. 
880; Winberry ▼. Koonce, 88 N. C 851 ; Porter ▼• Dunlap, 17 Ohio St 
501 ; 8 Schouler, Per. Prop. 670. 

4. EquitieB.— Theassignee takes the chose in action subject to all the 
equities existing in f aTor of the debtor at the time of the assignment 
Bloomer ▼. Henderson, 8 Biich. 403; Spinning t. SulliTan, 48 Mich. 6; 
LitUefleld t. Albany Co. Bank, 07 N. Y. 581; BusseU t. Eirkbride, 63 
Tex. 455; Lane ▼. Smith, 108 Pa. St 415; Callanan T.Edwards, 81 N. Y. 
488; Barney y. Grower, 88 Vt 801; Kamena ▼. Huelbig, 88 N. J. Eq. 
78; Kleeman t. Frisbie, 68 DL 488; Edson y. Gates, .44 Mich. 85a 
Whether the assignee takes the chose bi action subject to what are 
called " latent equities,*' the equities of a prior assignor or a third pefson, 
is a question up<m which the authorities are not agreed. See Bush t. 
Lathrop, 88 N. Y. 585; Bloomer t. Henderson, 8 Mich. 806; Sumner t. 
Waugh, 58 OL 581; 8 PcmeKoy's Eq. Juris, sees. 708-7ia 



n. i L THE ASSIONHENT OF OONT&AOr. SQ7 

ment of a debt accruing from him to tho assignor. He 
refused to be boond by the assignment aftd paid his debt to 
the assignor. He was held liable not rrithstanding to the 
assignees for the amount assigned! 

ifi) Policies of life insurance.— Bj 30 & 81 Yiot e. 144^ 
poUcies of life insurance are assignable in a form specified 
by the Act, so that the assignee may sue in his own name. 
Notice must be giyen by the assign ^e to the Assurance Oom- 
pany, and he takes subject to such defences as would have 
been valid against his assignor. 

(r) Policies of marine insuran^^e. — By 81 & 82 Yict. a 
86, policies of marine insurance are similarly assignable; but 
this statute contains no requirement as to notice. * 

{i) Shares in Companies are assignable under the pro- 
visions of the Companies CUuses Act, 1845, and the Com- 
panies Act, 1862.« 

(t) Mortgage debentures issued by Companies under the 
Mortgage Debenture Act are assignable in a form specifled 
by the Act.^ 

KaGCTiABiLmr. 

Assignability to bo distinguished. — So far we have dealt 
with the assignment of contracts by the rules of Common 
Law, equity and statute, and it would appear that under the 
most favourable circumstances the assignment of a 
contract binds the party chargeable to the ^assignee, [*226] 
only when notice is given to him, and subject always 
to the rule ihat a man cannot give a better title than he 
possesses in himself. 

From negotiability. — We now come to deal with a class 
of promises the benefit of which is assignable in such a way 
that the promise may be enforced by the assignee of the 
benefit without previous notice to the promisor, and without 
the risk of being met by defenses which would have been 
good against the assignor of the promise. In other words. 

«.f#fvioi«.iflL|i4:»*» viol attain. 
k»jt»vioi«.ia 



M ofbrahon of OONTRACT. Fnt m. 

we oome to consider negotiaNe indrum&nti as distinguished 
from amgnabU eontraeU* 

Features of negotiability.— The essential features of 
fisgotiability appear to be these. 

Firstly, the written promise gives a right of action to the 
holder of the document for the time being, though he and 
his holding may be alike unknown to the promisor. 

Secondly, the holder is not prejudiced by defects in the 
title of his assignor; he does not hold subject to such de- 
fences as would be good against his assignor. 

Notice therefore need not be given to the party liable, and 
the assighor*s tiUe is immateriaL 

Negotiability by custom.— Certain contracts are nego- 
tiable by the custom of merchants recognised by the Courts; 
such are bills of exchange, foreign and colonial bonds ex- 
pressed to be transferable by delivery, and scrip certificates 
which entitle the bearer to become a holder of such bonds 
or of shares in a company.* 

By statute. — Certain other contracts have been made 
negotiable by statute, as promissory notes by 8 & 4 Anne, 
c. 9, and East India bonds by 61 Geo. IIL o. 4. 

Bills of lading, which are affected both by the law me^ 
chant and by statute, possess some characteristics which will 
call for a separate consideration. 

Bills of exchange and promissory notes figure so con- 
stantly in the law of contract, and are so aptly illos- 
[*22T] trative of the *nature of negotiability, that we will 
shortly consider their principal features. 

A bill of exchange is an unconditional written order ad- 
dressed hj M to X directing X to pay a sum of money to a 
specified person or to bearer.* Usually this specified per- 
son is a third person Ay but M may draw a bill upon X n 
favour of himself, or he may draw upon X in favour of X 
We must assume that the order is addressed to X either be- 

• Bnmball ▼. MetropoUttui Bank, 9 Q. & D. 191 
» 46a« Vlota61,il. 



CShap. IL iS L THE ASSIGNMENT OF OONTBACr. 9M 

eanse he has in his control funds belonging to if or is pre- 
pcured to give him oredit; and since we are here dealing 
with bills of exchange merely as illustrative of negotiabil- 
ity, we will adopt the most usual, as it is the most con- 
veni/dnt form for illustration. 

How drawn. — M directs X to pay a sum of money to J 
or order, or to J. or bearer. M is then called the drawer 
of the bill, and by drawing it he promises to pay the smx/ 
specified to Jl or any subsequent holder if Xdo not accept 
the bill or, having accepted it, fail to pay. 

How accepted. — Until acceptance, X, upon whom the 
bdl has been drawn, is called the drawee. When X has 
assented to pay the sum specified, he is said to become the 
acceptor. Such assent must be expressed by writing on the 
bill signed by the acceptor, or by his simple signature.^ An 
acceptance is an unconditional promise to pay the sum 
named when due. 

If the bill be payable \x> A or bearer, it may be trans 
ferred from one holder to another by mere delivery: if it is 
payable to J. or order, it may be transferred by indorse- 
ment. 

How indorsed. — Indorsement is an order, written upon 
the bill, and signed by A^ in favour of Z?, Its effect is to 
assign to D the right to demand acceptance or payment of 
the biU from X when due, and in the event of default by X 
to demand it of M^ the original drawer, or of A^ against 
whom he has a concurrent remedy as being to all intents a 
new drawer of the bilL 

(a) SpeciaUy. — If the indorsement be simply to i>, or to 
D or order, the bill may be assigned by J9 to whomsoever 
he will in the same manner as it was assigned to him. 

(b) In blank. — If the indorsement be the mere 
signature of A^ it is ^indorsed in blank, and the bill [*228] 
then becomes payable to bearer, that is, assignable 

1 "Bj the law merchant a Torbal acceptance was binding on the ao- 
aepfeor, and la ao now in those states where statutes ha^e not been 
enacted proTiding to the contrary. The role stated bj the anther is 
statototy. 19 and 90 Victoria, c. ,aeaS. 



100 OPERATION OF CONTEACT. Part m. 

by deliTery. A has given his order and that addressed to 
no one in partioolar ; the bill is in fact indorsed over to anj 
one who becomes possessed of it. 

A promissory note is a promise in writing made by Xto 
A that he will pay a certain sum at a specified time or on 
demand to ^ or order, or to J or bearer. jr,tbe maker of 
the note, is in a similar position to ttiat of an acceptor of a 
bill of exchange; and the roles as to assignment by dellT- 
ery or indorsement are similar to those relating to a bill of 
exchange. 

Assignability dlstingnished from negotiability.— Wt 

may now endeavour to distinguish, by illustration from the 
case of instruments of this nature, the difference between 
aB9ignabUity and negotiabilUy. 

Let us suppose that X makes a promissory note payable 
to Jl or order, and that A indorses it over to 2>. D calls 
upon X to pay the value of the note, and sues him upon 
default 

In the case of an ordinary contract, D would, at the least, 
be called upon to show that he had given consideration to 
A for the assignment; that notice of the assignment had 
been given by him to X; and he would then have no better 
title than A. 

Consideration presumed — Notice not needed. — In the 
case of negotiable instruments Consideration is presumed 
to have been given until the contrary is shown, and notice 
of assignment is not required. 

The assignee may have a better title than the as- 
signor* — But suppose it turn out that the note was given 
by X to ^ for a gambling debt, or was obtained from him 
by fraud. The position of 2> is then modified to this ex- 
tent 

As between A and Xthe note would be void or voidable 
according to the nature of the transaction, but this does not 
affect the rights of a bona fide holder for value, that is, a 
person who gave consideration for the note and had no no- 
tice of the vitiating elements m its origin. The prtsomp- 



Ghap. n. § L THE ASSIGNMENT OF GONTBAOL 801 

tions of law under these oiroumstanoes are, (1) that 

D did not give *valae for the bill, bat (2) that he [^229] 

was ignorant of the fraud or illegality; for fraud, 

or participation in an illegal act, is never presumed.^ It 

will be for i> to show that he gave value for the bill, bat 

for Xto show that D knew that the bill was tainted in its 

origin. If D proves his point and X fails to prove his, 

then D can recover in spite of the defective title of Ay his 

assignor.* 

The case of Crauoh v. Credit Fancier of EngUmd^ fur- 
nishes an illustration both of the nature of negotiability 
and the limits within which the creation of negotiable in- 
atnunents is permissible. 

An instrument under seal is not negotiable. — A de- 
benture, assignable under the Companies Act and expressed 
to be payable to the bearer, was stolen; the thief sold it to 
the plaintiff, and he sued the Company for non-payment; 
the jury found that he was a hona fids holder for value of 
the debenture, but the Court held that he could not recover, 
because, in spite of the wording of the debenture, it was 
an instrument under seal and therefore could not be, what 
it purported to be, a negotiable instrument assignable by 

•. ^srlfleonBll]i,6d.U,ii.l28» 

1 The rule Stated in the text is said not to apply when the biU or note 
!• made payable to bearer, and that, in auoh oasoi the holder must show 
that he was a honxi fidt holder, and not the person to whom the note 
wsfl giTen, BiaseU ▼. Morgan, 11 Cush. 198; and by the weight of 
American authority, where it is shown that the bill or note was ob- 
tained through fraud or upon an illegal consideration, the holder has 
the burden of eBtabliahing that he purchased the note without knowl- 
edge or notice of such fraud or illegality. Faton ▼. Coit, 6 Mich. 610; 
Osrrier t. Ciameron, 81 Mich. 879; Conley t. Winsor, 41 Mich. 258; Per- 
Ehi Y. Noyes, 89 Me. 884; McKiason ▼. Stanberry, 8 Ohio St. 166; Sloan 
▼. Union Bank Go. 67 Pa. St. 470; Smith y. Livingston, 111 Mass. 844; 
dark Y. Thayer, 106 Mass. 318. This rule is understood as requuring 
the bolder of the note or bill to show the circumstances under which he 
obtained title to the instrument sued on, and not that he should pfOYe 
anegatiYa 1 DanL Neg. Inst bmx 819; DaYis y. Bartlett^ IS Ohio Bt 
6«L 



803 OPERATION OF CONTRACT. Ptei m 

delivery. The plaintiff therefore suffered for the defectiTe 
title of his assignor. 

Had the debenture been a negotiable instrument, the 
plaintiff could have recovered ; for, as Blackburn, J., said, 
in speaking of such contracts, '^ the person who, by a gen- 
uine indorsement, or, where it is payable to bearer, by a 
delivery, becomes holder, may sue in his own name on the 
contract, and if he is a bona fide holder for value, he has a 
good title, notwithstanding any defect of title in the party 
(whether indorser or deliverer) from whom he took it." * 

But the case further goes to show that a man cannot, by 
merely making an instrument payable to bearer, make it 
thereby negotiable, if the custom of the law merchant does 
not recognise it as such; or if, by being so recognised by 
the custom of merchants, the character of the instrument 
preclude its negotiability. For it had been the custom of 
merchants to treat these debentures as assignable by 
[*280] delivery; yet when *one of them came before the 
Courts it was at once denied the incidents of negc 
tiability as incompatible with its character of an instn 
ment under seal 

Bill of lading. — It would not be desirable to go further 
into the subject of negotiable instruments than is neces- 
sary to exhibit the essential features of negotiability. We 
may however , notice the character of '' bills of lading," 
as possessing some peculiar marks. A bill of lading is 
called "a document of title," ^^a symbol of property;" 
and the meaning of these phrases is this. The bill of lading 
is a receipt by the master of a ship for goods bailed to him 
for delivery to X or his assigns. Of this receipt three 
copies are made, each signed by the master. One is kept 
by the consignor of the goods, one by the master of the 
ship, and one is forwarded to X, the consignee, who, on re- 
ceipt of it^ acquires a property in the goods, which osn 



Obsp. n. § L THE ASSIGNMENT OF CONTRACTT. 809 

only be defeated by the exercise of the vendor's equitable 
right of stoppage in transitu.^ 

What rights its assignment confers. — The assignment 
of the bill of lading by indorsement by the consignee to a 
holder for value gives to that holder a better right than the 
consignee himself possessed. He has a title to the goods 
which overrides the vendor's right of stoppage in transitUj 
and gives him a claim to them in spite of the insolvency of 
the consignee and the consequent loss of the price of his 
goods by the consignor.^ ^ 

By law merchant, proprietary rights. — His right, how- 
ever, which in this respect is based upon the law merchant, 
is a right of property only. The assignment of the bill of 
lading gives a right to the goods. It did not, at Oommon 
Law, give any right to sue on the contract expressed in the 
bill of lading. 

By 18 and 19 Tict c. Ill, eontractnal rights.— This 
right is conferred by 18 and 19 Yict. c. 111. By that act the 
^gnment of a bill of lading is made to transfer 
*not only the property in the goods, but ^' all rights [*281] 
of suit " and all liabilities in respect of the goods 
^^as if the contract contained in the bill of lading had been 
made with himself." 

As regards the negotiability of a bill of lading, it differs 
in some important respects from the instruments with which 
we have just been dealing. 

Its assignment transfers rights in rern^ rights to specific 
goods, and these to a certain extent wider tJban those pos- 
sessed by the assignor; therein it differs from negotiable 
instruments which only confer rights in personam. 

m, Sl0|i|MiffB i» frtnwifii is th« rl^ht of ths unpaid ipvndor, npon learniiiff tk» fn- 
wtitwrnttf of the bnjer, to retake the goods before thej reach the buyer*! poaeeerion. 
For the hietoiy of thJa right the reader la referred to the Judgment of Lord Ablnger, 
3. B.,lB Ofbaoa ▼. Carrathera, 8 M. ft W. a»; for tti application, to Benjamiw m 
jalaa. bk. ▼, part l 

h. liekbarrow ▼. Maaon, 1 Sm. L. 0. 8BB. 

IBank of Rochester ▼• Jones, 4 N. Y. 497; Bloasom ▼. Ghampion, 88 
Barb. 828; First National Bank ▼. Crocker, 111 Mass. 168. A Taluahls 
note regarding the negotiability of bills of lading is found in Chaniltor 
w. SKagWb 88 ▲»• Dea 488. 



OPEk/ HON OF OONTRiLCr. FM IIL 

But not independent of assizor's title. — Bat though 
the assignee is rdieved from one of the liabilities of the 
assignor, he does not acquire proprietary rights independ- 
ently of his assignor's title: a bill of lading stolen, or trans- 
ferred without the authority of the person really entitled, 
gives no rights even to a bona Jlde indorsee.' And again, 
the contractual rights conferred by statute are expressly 
conferred subject to equities. A bill of lading then may 
be called a contract assignable without notice, partaking m 
some respects of the character of conveyance, inasmuch as 
it gives a title to property, but incapable of giving a better 
title, whether proprietary or contractual, than is possessed 
by the assignor;^ subject always to this exception, that 
one who takes from an assignor with a good title is relieved 
from liability to the vendor's right of stoppage in transitu 
which might have been exeroised against Uie original con- 
ngnee. 

$ S. Auiffnmsni qf contracti$al rights and UabUities ly op- 
eratianof law. 

We have hitherto dealt with the mode in which the par 
ties to a contract may by their own acts assign to others 
the benefits or the liabilities of the contract But rules of 
law may also operate to transfer to one person the rights 
or the liabilities of another. 

Assignment of interests in land. — If ^ by purchase or 

lease acquire an interest in land of Jf, upon terms 

[*232] which bind them by contractual obligations in *re- 

spect of their several interests, the assignment by 

either party of his interest to X will vnthin certain limits 

operate as a transfer to Xof those obligations. 

•. Ganij ▼. Behrend, S B. * B. esu 

1 «« A biU of lading, thoagh transferable hy dtiiwtrj, like oommflraal 
paper, is unlike oommerdal paper in this : the assignee cannot aoqniie 
a better title to the proper^ thus symbollcaUy deUyered than his ss* 
signer had at the time of assignment** Straus ▼. Weasel, SO C^k) St 
S16; bnery ▼. Inring National Bank. S6 Oh. St Sia 



GhapLlLii. THE ASSIGNMENT OF GONTRAOr. 806 

Marriage^ which once transferred to the husband condi 
tionally the rights and liabilities of the wife, has little 
effect since the Act of 1882. 

Representation^ whether in the case of death or bank- 
ruptcy, operates to confer in the one case upon the execu- 
tors or administrators of the deceased, in the other upon 
the assignees of the bankrupt, his rights and liabilities; but 
the assignment is merely a mechanical contrivance for con- 
tinuing, up to a certain point and for certain purposes, the 
legal existence of the deceased or the bankrupt They to 
whom the contract is assigned take no benefit by it, nor are 
they personally losers by the enforcement of it against 
them. They merely represent the original contracting 
party to the extent of his estate and no more. 

A^iignmeni of 6bUgaUan$ upon the trcMafer of ifU&ruts m 

land. 

a. OowncmU Cffftdmg leasehold ifUereete. 

Ck>Tenants affecting leasehold run with the land.— At 
Common Law these are said to ^^ run with the land and not 
with the reversion," that is to say they pass upon an assign- 
ment of the lease, but not upon an assignment of the re> 
version. If the lessee assigned his lease, the man to whom 
he assigned it would be bound to the landlord by the same 
liabilities and entitled to the same rights as his assignor, to 
this extent:^ — 

(1) If they concern the thing demised. — Covenants in 
a lease which ^ touch and concern the thing demised '' pass 
to the assignee of the lessee whether or no they are ex- 
pressed to have been made with the lessee " and his assigns." 
Such are covenants to repair, or to leave in good repair, or 
to deal with the land in any specified manner.* * 

•. SeeoMMOoltoeted In note to Spencer*! dm, 1 Sm. L. a 78, 71 

iCSrawford v. Chapman, 17 Ohio, 449; Patten t. Dwhon, 1 Qrajr, tS5 
fiBher Y. Deering, 60 IlL 114. 
t Donelaon ▼. PoLk. 64 McL 601 ; Leppla t. Markev. 31 Minn. 76; O^i 
SO 



«i« OPERATION OF CONTEACr. Ptet m 

(2) When to assign only if nfimed.— CoTenanta 

[*233] in a lease which touch and concern the * thing 
demised, but relate to something not in existence at 
the time of the lease, are said to pass to the assigns onlj 
if named, that is to say, if the covenant be expressed as 
made with heirs and assigns. But although this rule is 
laid down in the leading case * upon the subject, it has been 
go unfaTourably commented upon in a modern decision that 
its validity is extremely questionable.^ 

(3) Not if purely personal. — In no case does the assignee 
of the lessee acquire benefit or liability from merely per- 
sonal or collateral covenants made between his assignor and 
his landlord. X the lessee covenanted to use his premises 
as a public-house. A the lessor covenanted not to build or 
keep any house for sale of beer or spirits within half a mile 
of the demised premises. X assigned his lease to M} It 
iiras held that the benefit of A\ covenant did not pass to M. 

Covenants do not run with the reversion except by stat- 
ute. — The reversioner or landlord does not, at Common 
Law, by the assignment of his interest in the land convey 
his rights and liabilities to the assignee. 

It was not till 32 Hen. VIIL c. 34, that the law in this 
respect was changed, a change probably due to the dissolu- 
tion of the monasteries. By that act the assignee of the 
reversion is enabled to take the benefits, and also incurs the 
liabilities, of covenants entered into with his assignor: and 
it has been settled that the rules as to the connection of 

«. lfiiMlraUT.0ak6t.tH. AN. 808. 

6. numiM ▼. Hi^ward, U B. 4 lExeh. tlL 

«an V. McDaniel, 73 Ala. 96; Sujdam ▼. Jones, 10 Wend. 180; Demarest 
▼. WiUard, 8 Cow. 806; Post v. Kearney, 2 Comst. 894; KeUogg t. Bobi- 
•on, 6Vt 876. 

1 The role of the leading case foUowed in Hansen t. Mjer, 81 HL 823; 
Bream ▼. Dickerson, 21 Tenn. 126; Masury t. Southworth, 9 Ohio Bt 
840; TnUman t. Coffin, 4 N. Y. 184; Coffin ▼. Tallman, 8 N. Y. 466; 
BaUey ▼. Bichardaon, 66 CaL 420. See Doney ▼. St Louis, eta B. & 66 
111.711 



COiap. n. § 3. THE ASSIGNMENT OF CONTRilCT. 807 

the covenants with the thing demised apply to such m 
ran with the reversion equally with those that rim with the 
land.* The act only applies to leases under seal,* but in 
case of leases from year to year, payment of rent, and the 
acceptance of it, is held to be evidence from which a jury 
may infer '^ a consent to go on, on the same terms sa be- 
fore." » 

p. Covena/nti affedmg freehM 

Covenants with owner. — At Common Law, covenants 
entered into v)ith the owner of land, that is to say, proni- 
ises under seal made to the owner of land, and for 
his benefit, pass to his assignees, provided *they [*234] 
touch, and concern the land, conveyed and are not 
merely personal 

X a vendor of land covenants with A the purchaser that 
he has a good right to convey the land; the benefit of such 
a covenant would pass from A to his assignees. It would 
be otherwise if a covenant were introduced into the convey- 
ance relating to some matter purely personal between A 
andX« 

Ciovenants by owner. — On the other hand, covenants 
entered into hy the owner of land which restrict his enjoy- 
ment of the land, do not at Common Law bind his as- 
signees, except he thereby create certain well-known inter- 
ests, such SA easements and profits, recognised by Law. 

«. 8m. L. a 1« 60L 

II For Wfllaa. J., Oonilab ▼. Stobbt, L. R. S 0. P. 889. 

A IMo«j, FiartiM to Aotlona, VM^^ 

1 The statute of Henrj VIIL is in force in several states and in others 
it has been enacted. See Baldwin ▼. Walker, 21 Conn. 168; Howland 
▼. Coffin, 12 Pick. 125; 1 Wash. R P. 827. Under the code of dvil pro- 
oedore it is considered that the assignee of the reversioner is the real 
party ^ interest, and as such is entitled to maintain an action on the 
oofeoanU of the lease. liasoryy.Soathworth^QOhioSt 840; Smith ▼. 
HaiTison, 42 Ohio St 184. In Miohigaa \% k held that the oommoo law 
mis k inaj^ilioaUe to the droamstanoes of the pwsont daj^ and that a 
r ma/ aarign the right to sue for rant to bsoome doe vadar a 
iy.Upp«,841liAMw 



808 uFERiLTIOM OF CONTBAOT Ptet DL 

Common Law Tiew. — If a man endeavour to ereate re- 
itrictions on his land which are not incloded in the circle of 
rights in rs aliena known to the Common Law, he cannot 
affix those rights to the land so as to bind snbseqaent owners. 
The cases * which deal with attempts to create ^^ an ease- 
ment in gross " illustrate this proposition, tne principle of 
which is thus enunciated by Lord Brougham in Keppell v. 
Baily: * — '' It must not be supposed that incidents of a 
novel kind can be devised and attached to property, at the 
fancy or caprice of the owner. . . . Great detriment 
would arise and much confusion of rights, if parties were 
allowed to invent new modes of holding and enjoying real 
property, and to impress upon their lands and tenements a 
oeculiar character, which should foUow them into all hands 
however remote. " 

Equitable enforcement of restrictive covenants. — ^"^ 
the Courts of Equity have established a class of exceptiona 
to this general rule, and although these have been mainly 
confined to covenants in the case of land sold for building 
purposes, it is difficult to see what limitations can be intro- 

m. Stockport Watenrorki Co. ▼. FMter, t B. ^ a WH 
II % Mjlne ft Keen, 617. 

1 Keppell T. Bailj.— *' The benefit of a ooTenant paaeee with tiie lud 
to which it is incident, but the burden or liability ia confined to the orig- 
inal ooTenantor, unless a privitj of estate between him and the ocfw^ 
nantee exists, or is created at the time the covenant is made^** Cde ▼• 
Hughes, 64 N. T. 444; Todd t. Stokes, 10 Pa. St. 166; Weld y. Nichols, 
17 Pick. 643; Brewer ▼. Cheeeeman, 18 N. J. Eq. 887; Dorsey ▼. St 
Louis, etc. R. R. Co. 68 IlL 66 (Conduitt v. Ross, 102 Ind. 166); Block t. 
Uham, 28 Ind. 87; Martin ▼. Dryman, 128 Mass. 616; Parish y. Whitn^, 
8 Qraj, 616; Kennedj ▼. Owen, 186 Mass. 201 ; National Bank y. Segor, 
88 N. J. L. 184; Haslett y. Sindaur, 76 Ind. 489; Scott y. McMUlan, 76 
N. Y. 141. In National Bank y. Segur, supra, Beasley, a J., esid: 
" There is such an essential difference, in sodal effect, between pennitp 
ting a Imrihen to be annexed to the transfer of land and the giying to • 
ben^ such a qualitj, that the subject wiU unayoidablj run into ob- 
scurity, unless the distinction is kept constantlj in yiew. Tha con- 
spiouous impolicy of allowing land to be trammeled in its tranafer, to 
the extent that previous owners may choose to affect it hj their ooo' 
moti, was pointed out and condemned in the case of Breww ▼• Msr 
riiaU, 8 a E. Ghreen, 887.** See Hartung y. Witte, 68 Wis. SNb 



n. S& THE ASSIGNMENT OF CONTBAGT. Ml 

dnced to the principle on which they are enforced. The 
Tiew taken by Courts of Equity may be thus illnstrated. 
A sells land to X and covenants that he Ay being possessed 
of adjoining land, will never use it otherwise than in a 
particular way. A sells his land to M with notice of the 
covenant, and IPs enjoyment of the land is then 
limited by the terms of *the covenant The prin- [*835] 
ciple is thus stated by Lord Cottenham: — ^'That 
this Court has jurisdiction to enforce a contract between 
the owner of land and his neighbour purchasing a part of it^ 
that the latter shall either use or abstain from using the 
land purchased in a particular way, is what I never knew 
disputed. . . It is said that the covenant,* being one which 
does not run with the land, this Court cannot enforce it; 
bat the question is, not whether the ooverumt runs wUh the 
landj hU whether a party shall he permitted to use his land 
in a manner inconsistent with the contract entered into by his 
vendor J and with notice of which he purchased.^ ^ 

Assignment of contracttud obligation upon marriage. 
The only eflfect which marriage now • produces by way 
. of assignment of rights or liabilities is that if the separate 
estate of the wife be insufficient to satisfy her antenuptial 
contracts the husband is liable to the extent of all property 
which he shall have acquired or became entitled to through 
his wife.* 

Assignm^ent qf contractiud obligation by death. 
Sepresentatives acquire all contractual rights whieli 
affect personal estate. — Death oasses to the executors or 

«. Talk ▼. Mo^mjt t Rl Tfi, 

lL«^4SVIclaTS,Hia,li. _^ 

1 Btinee v. Dorman, 25 Ohio St. 460; HaskeD ▼. Wright, S G. E. Greon 
889; Clark t. Martin, 49 Pa. St 989; Trustees of Columbia CoUege v. 
Thacher, 87 N. T. 812. 

'In the states generally there is no assignment of oontractoal obligaf 
tkma upon marriage. The husband does not aoquire any property 
through his wif a The common-law rule which transferred to the hu^ 
band his wife's personal property and borthened him with har Hahilitisi 
has been abrogated by statutes of the states. 



BIO OPERATION OF OOlflBiLCT. Pftri m. 

administrators of the deceased all his personal estate, aU 
rights of action which would affect the personal estate, and 
all liabilities which are chargeable upon it Thas oovenanta 
which are attached to leasehold estate pass, as to benefit 
and liability, with the personalty to the executor or admin- 
istrator, while covenants affecting freehold, as covenants 
for title in a conveyance of freehold property, pass to the 
oeir or devisee of the realty. 

If not dependent on personal skill or service. — And for 
tber performance of such contraota as depend upon the per 
sonal services or skill of the deceased cannot be demanded 
of his representatives, nor can they insist up>on offering such 
performance. Contracts of personal service expire with 
either of the parties to them : an apprenticeship contract 
is thus terminated by the death of the master, and no 
daim to the services of the apprentice survives to the exec- 
utor.* 
[*236] *In like manner a breach of contract which in- 
volves a purely personal loss does not confer a right 
of action upon executors. In Chamberlain v. WiUiamsan* an 
executor sued for a breach of promise to marry the deceased, 
the promise having been broken and a right of action hav- 
ing accrued in the life-time of the testatrix. But the Court 
held that such an action could not be brought by represent- 
atives of a deceased person, inasmuch as it did not clearly 
appear that the breach of contract had resulted in damage 
to the personal estate. ^^ Although marriage may be re- 
garded as a temporal advantage to the party as far as re- 
spects personal comfort, still it cannot be considered as an 
increase of the transmissible personal estate." ^ 

•. Baxter ▼. Burfl«ld«l Str. im^ 

k % iLft aioa 

1 Chamberlain v. Williamson.— Notwithstanding the fact most states 
haTO statutory proTiaions to the effect that a personal repreaentatiTe maj 
sae or be sued on any contract of or with liis deceased, still it is gener 
ally held that such statutes do not change the rule in Chamberlain «• 
WiUiammm^ and that an action on a breach of promise to marry is in 
IM nature of an action ex dAicto. Qrabb» Adm*r, ▼. Sull, 8S Qrat W; 



n. SI THE AiSSIONMENT OF OOJXTSLAOS. til 



Asngnmeni qf cofUrtuifial oUigation ly ha/fjJcruptey. 

Trnstee's powers: their extent, and limits. — The 

tmstee of a bankrupt is appointed for the purpose of getting 
in and dividing the property for the benefit of the creditors. 

The Bankruptcy Act, 1883, provides that where any part 
of the property of a bankrupt consists of things in action, 
such things shall be deemed to have been duly assigned to 
the trustee.* 

And inasmuch as the duty of the trustee is not merely to 
represent the bankrupt, but to represent him with special 
reference to the interests of his creditors, he is able to dis- 
claim, and so discharge such executory contracts as he 
thinks will not be beneficial to the estate. 

But, it may be doubted whether, like the representative 
of a deceased person, he is not excluded from suing for 
^ personal injuries arising out of breaches of contract^ such 
as contracts to cure or to marry." * 

•. 48^47 Viet a 61,1 80 9); Id. 1 6Bw 
«L DimkiT.BMskluun,ll]LftW.tllL 

StellinB V. Palmer, 1 Pick. 71; Smith ▼. Sherman, 4 Gush. 40S; Lattl- 
nore y. Simmooi, 18 Serg. ft R. 1S8; Wade v. Kalbfleiach, 68 N. Y. 28S: 
Chase v. Fitz, 188 Haas. 863; Hovey ▼. Paige, 66 M& 142. The cases 
cited hold that for the reasons stated in the leading case, the actioo 
eumot be maintained against the representatiTee of the promisor. 



PART lY. 

TOL CfTEBPBETATION OF OOVTRJLCt. 

InterpreUtion of eontract. — After oonmdering the de- 
ments necessary to the formation of a contract, and the 
operation of a contract as regards those who are primarily 
interested under it, and those to whom interests in it may 
be assigned, it seems that the next point to be treated is the 
mode in which a contract is dealt with when it comes before 
the Courts in litigation. In considering the interpretation of 
eontract we require to know how its terms are proved; how 
far, when proved to exist in writing, they can be modified 
by evidence extrinsic to that which is written; what rules 
are adopted for construing the meaning of the terms when 
fully before the Court 

Bales relating (1) to evidence, and (2) to eonstrnetion. 
The subject then divides itself into rules relating to evidence 
and rules relating to construction. Under the first head we 
have to consider the sources to which we may go for the 
purpose of ascertaining the expression by the parties of their 
common intention. Under the second we have to consider 
the rules which exist for construing that intention from ex- 
pressions ascertained to have been used. 



OHAPTEB L 
Bnles relating to eyldenoe. 

FroTiBCM of Court and Jury.— If a dispute should arise 
as to the terms of a contract made by word of mouth, it is 
necessary in the first instance to ascertain what was said, 
and the circumstances under which the supposed contract 
was formed. These would be questions of fact to be deter- 
mined by a jury. When a jury has found, as a matter of 
fact, what the parties said, and that they intended to enter 
into a contract, it is for the Court to say whether what they 
have said amounts to a contract, and, if so, what its effect 
may be. When a man is proved to have made a contract 
by word of mouth upon certain terms, he cannot be heard 
to allege that he did not mean what he said.^ 

The same rule applies to contracts made in writing. 
Where men have put into writing any portion of their 
terms of agreement they cannot alter by parol evidence that 
which they have written. When the writing purports to be 
the whole of the agreement between the parties, it can 
neither be added to nor varied by parol evidence. 

Why oral contracts need not be discussed.— We may, as 
regards rules of evidence, dismiss purely oral contracts from 
our consideration. For the proof of a contract made by 
word of mouth is a part of the general law of evidence; the 
question whether what was proved to have been said 
amounts to a valid contract is a question to be answered by 
reference to the formation of contract; the interpretation of 
such a contract when proved to have been made may be 
dealt with presently under the head of rules of construo- 
tion. 



S14 XMTEBPBETATION OF COllTEACr. Ftet IV 

1*239] *Tliree matters of inquiry. — Oar oonsideration 
of the roles relating to evidence may be confined 
to their effect upon written contracts and contracts under 
seal; and we may say that admissible evidence extrinsic to 
such contracts falls under three heads. 

(1) L Proof ofexiat&noe of ^Kocn^fTim^.— Evidence as to 
the fact that there is a document purporting to be a con- 
tract, or part of a contract 

(2) 2. Q^/ac^^ojTtfam^^.— Evidence that the professed 
contract is in truth what it professes to be. It may lack 
some element necessary to the formation of contract, or be 
subject to some parol condition upon which its existence as 
a contract depends. 

(3) 3. Of terms of eorUrad. — Evidence as to the terms 
of the contract. These may require illustration which 
necessitates some extrinsic evidence; or they may be am- 
biguous and then may be in like manner explained; or they 
may comprise, unexpressed, a usage the nature and effect 
of which have to be proved. 

We thus are obliged to consider (1) evidence as to the 
existence of a document, (2) evidence that the document is a 
contract, (3) evidence as to its terms. 

Difference between formal and simple contract — lo 
the first the instrument is the contract. — We must note 
that a difference, suggested some time back, between con- 
tracts under seal and formal contracts, is illustrated by the 
rules pf evidence respecting them. A contract under seal 
derives its validity from the form * in which it finds expres- 
sion: therefore if the instrument is proved the contract is 
proved, unless it can be shown to have been executed under 
circumstances which preclude the fonnation of a contraoti 
or to have been delivered under conditions which have re- 
mained unfulfilled, so that the deed is no more than an es- 
crow. 

In the second the writing is only evidence of the eon* 
tract. — But ^' a written contract not under seal is not the 



QiM^ L g 1. RULES RELATING TO EVIDENCE. tI5 

contract itself, but only evidence, the record of the con- 
tract*' • Even where statutory requirements for writing 
exist, as under 29 Oar. II. c. 3, § 4, the writing is no more 
than evidentiary of a previous or contemporaneous agree- 
ment. A written offer containing all the terms of the con* 
tract signed by A and accepted by performance on the part 
of Bj is enough to enable B to sue A under that section. 
And where there is no such necessity for writing, it 
is optional to the parties *to express their agreement [*240 
by word of mouth, by action or by writing, or partly 
by one, and partly by another of these processes. 

It is always possible therefore that a simple contract may 
have to be sought for in the words and acts, as well as in 
the writing of the contracting parties. But in so far as they 
have reduced their meaning to writing, they cannot adduce 
evidence in contradiction or alteration of it. '^ They put 
on paper what is to bind them,^ and so make the written 
document conclusive evidence against them." * 



§ 1. Proof of DocumetU. 

Proof of contract under seal. — A contract under seal is 
proved by evidence of the sealing and delivery. Formerly 
it was necessary to call one of the attesting witnesses where 
a contract under seal was attested,' but the Common Law 

m. Wak» ▼. Harrop, 6H. A N. 776. 
b. Wake t. Harrop, 6 H. A N. 778w 

tSeempro, p. 47. 

1 Jackson ▼. Sheldon, 82 Me. 609; Burke t. MiUer, 7 Cuah. 547; Mel- 
cher T. Flanders, 40 N. H. 189; McAndrews ▼. Stillwell, 18 Pa. St 90; 
Donr T. School District, 40 Ark. 237; Henry ▼. Bishop, 2 Wend. 576; 
BaR7 y. Ryan, 4 Gray, 628; Hess ▼. Origgs, 48 Mich. 897. If the at- 
twting witness be dead, or incapable of testifying, or out of the juris* 
diction of the court, execution of the deed may be proved by proving 
the handwriting of such witness. Dunbar ▼. Marden, 18 N. H. 811 ; 
Beattie ▼. HiUard, 56 N. H. 486; Richards ▼. Skiff, 8 Ohio St 586; Yal- 
eotina t. Piper, 22 Pick. 86; Davis v. Higgins, 91 N. G. 882; Elliott ▼. 
Dgreke, 78 Ala. 150; 1 Whart £v. 726. The tendency of modem deci^ 
1011% howerer, ia to hold that proof of the handwritiao^ of the partgr <• 



116 II9TERPRETATI0N OF CX>NTRACr. Part IV 

Procedure Act, 1854,* enacted that this should no longer 
be required save in those exceptional cases in which attesta- 
tion is necessary to the validity of the deed. A warrant of 
attorney and a cognauit afford instances of instruments to 
which attestation is thus necessary.* 

Of simple contract — Supplementary oral erldeiice 
wbere contract written only In part. — In proving a sim- 
ple contract parol evidence is always necessary to show that 
the party sued is the party making the contract and is bound 
by it.* And oral evidence must of course supplement the 
writing where the writing only constitutes a part of the 
contract. For instance: AB in Oxford writes to X in 
London, ^^I will give £50 for your horse; if you accept 
iend it by next train to Oxford. (Signed) -4 A" To prove 
the conclusion of the contract it would be necessary to 

prove the despatch of the horse. And so if ^ puts 
[*241] the terms of an agreement into a written offer * which 

JT accepts by word of mouth ; or if, where no writ- 
ing is necessary, he puts a part of the terms into writing 
and arranges the rest by parol with X, oral evidence must 
be given in both these cases to show that the contract was 
concluded up>oD those terms by the acceptance of X' 

Or where connection of parts does not appear fi*om doc- 
nments. — So too where a contract consists of several docu- 
ments which need oral evidence to show their connection. 



A. 17ftl8Viote.M. 

b. Ante, p. 44. 

c Ai a matter of practloe, written oontracti are oommonlj admitted hf tlie partlet, 
eltlier upon the pleadlacB, or upoD notice being gtven hj one partj to the other to ad 
mlt auch a docimient Such admiaeiona are reg^ulated hj the Judicature Act* 187ft. 
Older -mrH Or one party may call upon the other to produce certain documenti, 
and upon hk falling to do so, and upon proof having been given of the notice to pro. 
dnce« the party calling for production may give lecondary evidence of the conteniiof 
the document. 

d. Harria v. Ricketi. 4 H. ft N. L 

•ufficient, when the witneesee cannot be produced, nnlesB the instru- 
ment is one which the law requires to be attested by witnesaea. Li id- 
en V. Bolton, IM Cat 394; Newaon v. Luster, 18 la 18S; Woodmav *. 
8egar» 26 Me. 90; Coe v. Davis, 17 Ala. 717. 



Chap. L §t. BX7LES BELATINO TO EVIDENGB. 817 

■Qoh evidence may be given to connect them.' From this 
rale we most except contracts of which the Statute of 
Frauds requires a written memorandum. There the con- 
nection of the documents must need no oral evidence to 
establish its existence.* 

But this is an illustration of the rale that where the Stat- 
ute of Frauds requires written evidence of a contract it re- 
quires such evidence as to the whole of the contract. And 
this requirement has been held inapplicable to contracts out- 
side the Statute. ^' I see no reason," says Brett, J., ^^ why 
parol evidence should not be admitted to show what docu- 
ments were intended by the parties to form an alleged con- 
tract of insurance.'' * 

There are circumstances, such as the loss or inaccessibil- 
ity of the written contract, in which parol evidence of the 
contents of a document is allowed to be given, but these are 
a part of the general law of evidence. The reader is re- 
ferred for a summary of the rules existing upon this sub- 
ject to Mr. Justice Stephen's Digest of the Law of Evidence, 
pp. 6ft-7a 

§ 2. Emdenoe aa to fact of Agreement. 

Thus far we have dealt with the mode of bringing a 
document, purporting to be an agreement, or part of an 
agreement, before the Court. But extrinsic evidence is ad- 
missible to show that the document is not in fact a valid 
agreement. 

It may be shown that incapacity of one of the parties, 
want of genuine consent, or illegality of object made the 
agreement of the parties unreal,' or such as the law 
forbids to be carried *into effect. In the case of a [*242] 
simple contract it may be shown, where the promise 

•. Bojdell T. Dnimmond, 1 Sast, 14S. 

b. XdwATds T. Aberayron Mutual Ins. Socle^, 1 Q. B. D. 667. 

iHjen ▼. MuBBon, 65 la. 423; Bergan t. W^iUiams, 188 Haas. 644; 
Oolby T. Dearborzi, 69 N. H. 826; Been ▼. Aultman-Taylcnr Go. 83 Minn. 
90; Blake ▼. Coleman, 22 Wia. 896. 

>Th«re is no queition but that parol eridenoe may be reoeired to show 



818 INTERPRETATION OF CONTRACT Pwt IV 

only appears in writing, that no consideration was giyen for 
the promise. Such evidence is constantly admissible to con- 
tradict the presumption of value given for a bill of exchange 
or promissory note.* But this must be distinguished from 
evidence which may be given as to the total failure of con- 
sideration promised, for this is a mode of discharge.* 

Evidence of condition suspending operation of con- 
tract. — Similarly in the case of a deed, where frand or 
undue influence is alleged, the absence or inadequacy of 
consideration may be adduced in derogation of the deed. 
Extrinsic evidence is thus admissible, not to alter the pur- 
port of the agreement, but to show that it was made under 
such conditions as to preclude the reality of consent. 

In the case of a deed. — Apart from such circumstances 
as these it is permissible to prove a parol condition sus- 
pending the operation of the contract. Thus a deed may be 
shown to have been delivered subject to the happening of 
an event or the doing of an act.^ Until the event happens 
or the act is done the deed remains an escrow^ and the terms 
upon which it was delivered may be proved by oral or docu- 
mentary evidence extrinsic to the sealed instrument. 

Of a simple contract. — And so it is with a written con- 
tract. Evidence may be given to the eifect that a docu- 
ment purporting to be a contract is not so in fact. It may 
be dependent upon a condition unexpressed in the document 
so that until the condition happens, the parties agree that 
the written contract is to remain inoperative. 

Thus in Fym v. CamjjbeU ' the defendants agreed to pur- 

o. Foster ▼. JoUy, 1 O M. ft B. TQSL 
h. SeePsartV, <sh.m,|& 
c See p. 47. 
4. 6 E. ft B. 870. 

that a written oontract, valid on its face» was entered into for an Ole- 
gal purpose or upon an illegal consideration. Wooden y. ShotweU, 88 
N. J. L. 465: Buffeudean v. Brooks, 2b Cal. 641; Allen t. Hawks, 18 
Pick. 79; Totten ▼. United SUtes, 92 U. 8. 105; Ferguson ▼. 8utphen, 
8 IlL 547; Shackford y. Newington, 46 N. U. 415; Pratt ▼. Langdon, 97 
Mass. 97. CotfUra, Porter ▼. Yiete, 1 Bisa. 177; LesUe v. Tangham, 40 
.524. 



Chap. L § S. BX7LES RELATING TO EVIDENCE. 819 

chase from the plaintiffs a portion of the benefits to be de- 
rived from a mechanical invention made by the plaintiffs. 
The purchase was to be made if one X approved of the in- 
vention, bnt before this approval bad been given they signed 
a memorandum of agreement on the express understanding 
that they did so for convenience only and that the agree- 
ment was not to bind them until the approval of one 
Abemethie had been ^intimated. Abemethie did [*248] 
not approve of the invention. The plaintiffs con- 
tended that the agreement was binding and that the verbal 
condition was an attempt to vary by parol the terms of a 
written contract But the Court held that the evidence was 
admissible, not to %(mi a loritten contract but to show that 
there had never been a contract at aU} 

The law was thus stated by Erie, J. : — ^' The point made 
is, that this is a written agreement, absolute on the face of 
it, and that evidence was adduced to show it was conditional: 
and if that had been so it would have been wrong. But I am 
of opinion that the evidence showed that in fact there was 
never an agreement at all. The production of a paper pur- 
porting to be an agreement by a party, with his signature 
attached, affords a strong presumption that it is his written 
agreement; and if in fact he did sign the paper anvino con- 
trahendiy the terms contained in it are conclusive, and can- 
not be varied by parol evidence: but in the present case the 
defence begins one step earlier; the parties met and ex- 
pressly stated to each other that, though for convenience 

1 Pfeffol evidenoe is admisBible for the purpose of showing that a con- 
tract formally executed never received the assent of the parties to it or 
was to reoeire their assent only upon a contingency that never happened ; 
but ia not admissible to vary the legal effect of a written contract as* 
sented to by the parties or to show that their liabUity thereunder, abso- 
lute in terms, was subject to a parol condition. Stephen's Ev. art 90; 
8 Whart. Ev. 927; 1 Green. Ev. 284; CuthreU v. Cuthrell, 101 Ind. 876; 
Anderson v. Walter, 84 Mich. 118. The writing is conclusive only as to 
the terms of the contract and does not conclusively establish its ezlsi- 
snce. Bumes v. Scott, 117 U. a 682; White v. Boyoe, 81 Fsd« B. 888; 
Leddy v. Bamay, 188 Mass. 894. 



XNTEBPBEIATION OF OONTBACT. Part IV. 

they would then sign the memorandum of the tenns^ yet 
thej were not to sign it as an agreement nntil Abemethie 
was consulted. I grant the risk that such a defence may be 
set up without ground; and I agree that a jury should 
therefore always look on such a defence with suspicion ; but, 
if it be proved that in fact the paper was signed with the 
express intention that it should not be an agreement, the 
other party cannot fix it as an agreement upon those so 
signing. The distinction in point of law is, that evidence to 
vary the terms qfan ojfreemerU in writing ie not admieeible^ 
hut evidence to show thai there ie not an agreement at all is 
admieeibUP 

% 3. Evidence ae tothe terms of the ContracL 
ETidence as to terms — General rale. — We now come to 

extrinsic evidence as affecting the terms of a contract, and 
here the admissibility of such extrinsic evidenoe is 
[*244] narrowed to a small compass: for ^' according to *the 
general law of England the written record of a con- 
tract must not be varied, or added to by verbal evidence oi 
what was the intention of the parties."* 

Exceptions. — We find exceptions to this rule -^ 

(a) in cases where terms are proved supplementary, oi 
collateral to so much of the agreement as is in writing; 

(ft) in cases where explanation of the terms of the contract 
is required ; 

ifi) in the introduction of usages into the contract; 

(i) in the application by equity of its peculiar remedies 
in the case of mistake. 

(a) Supplementary terms. — It may happen that the 
parties to a contract have not put all its terms into writing. 
Evidence of the supplementary terms is then admissible, 
not to vary but to complete the written contract.^ 

«. Per BUtckbuni, J., tn BurgM ▼. Wfekham, 8 B. ft S. 6M. 

I Ljon T. Lenon, 106 In<L 667; Walter A. Wood, ela v. 
IfidL 468; MobUe. eta v. Jurej, 111 U. a 6S4; Reynolds v. ] 
Tt44S; liMhv. ParUn,781la80t 



LS&. RULES BELATINO TO EVIDENGB. S21 

In Jervis v, B&rridge* the plaintiff agreed to assign to 
the defendant a contract for the purchase of lands from M. 
The assignment was to be made upon certain terms, and a 
memorandum of the bargain was made in writing, from 
which at the request of the defendant some of 'the terms 
were omitted. In fact the memorandum was only made in 
order to obtain a conveyance of the lands from M. When 
this was done and the defendant had been put in possession 
he refused to fulfill the omitted terms which were in favour 
of the plaintiff. On action being brought he resisted 
proof of them, contending that the memorandum could not 
be added to by parol evidence. Lord Selbome however 
hdd that the memorandum was ^^ a mere piece of machin- 
ery obtained by the defendant as sttbsidiary to and /or ths 
purposes of the verbal and only real agreement under circum- 
stances which would make the use of it, for any purpose 
inconsistent with that agreement, dishonest and fraudu- 
lent" 

Ciollateral terms. — Again, evidence may be given of a 
verbal agreement collateral to the contract proved, subject- 
ing it to a term unexpressed in its contents. Such 
a term however can *only be enforced if it be not [*24S] 
contrary to the tenor of the written agreement. 
Thus, where a farmer executed a lease upon the promise of 
the lessor that the game upon the land should be killed down, 
it was held that be was entitled to compensation for dam- 
age done to his crops by. a breach of such a verbal promise, 
though no reference to it appeared in the terms of the lease. 

Hellish, L. J., in giving judgment said, '^ No doubt, as a 
mle of law, if parties enter into negotiations affecting the 
terms of a bargain, and afterwards reduce it into writing, 
verbal evidence will not be admitted to introduce additional 
terms into the agreement; but, nevertheless, what is called 
a collateral agreement, where the parties have entered into 
an agreement for a lease or for any other deed under seal, 
may be i»Ade in consideration of one of the parties execat- 

A tCB» «vi. 
AA 



829 INTERPRETATION OF CONTRACT. Part IT 

ing that deed, onless, of oonrse, the stipalation oontradicti 
the terms of the deed itself. I quite agree that an agree- 
ment of that kind is to be rather closely watched,* and that 
we should not admit it without seeing clearly that it is sub- 
stantially proved." ^ 

(b) Explanation of terms; to identlf)|r parties. — Ezpli^ 
nation of terms may merely amount to evidence of the 
identity of the parties to the contract, as where two per- 
sons have the same name, or where an agent * has con- 
tracted in his own name but on behalf of a principal whose 
name or whose existence he does not disclose.' 

Or snbject-matter. — Or it may be a description of the 
subject-matter of the contract, as in a case in which A 
agreed to buy of X certain wool which was described as 
" your wool," and the right of X to bring evidence as to 
the quality and quantity of the wool was disputed. The 
Court held that it was admissible, and Erie, J., thus stated 
the grounds of decision : — 

<< I am of opinion that the plaintiffs are entitled to suo- 
oeed. I assume that they must prove a written contract, 
and that that contract must contain all the material terms. 
The contract here is most explicit: it is to purchase 
[*24:6] of the plaintiffs *"your wool," at 16*. a stone, to 
be delivered at LiverpooL The oral evidence is no 
doubt admissible to identify the subject-matter of the con- 
tract, and to show what "your wool "really was. The 
judge, who has to construe the written document, cannot 

<k BnkliM T. AdeaiM, 8 Ch. at p. 771 
k Wake ▼. Barrop, 6 H. it N. 78& 

1 Walker t. France, 112 Pa. St. 203; Liebke ▼. Hethuda, IS Ma App. 
148; Keen ▼. Beckman, 66 la. 672 ; Renej v. VerriU, 89 Me. 271 ; Binnej 
▼. MorriU, 67 Me. 878; Carr ▼. Dooiej, 119 Maas. 294; McGormick ▼. 
CheeTera, 124 Maaa. 262. 

si^ach ▼. Dodson, 64 Tex. 186; Johnson ▼. Bennett, 67 Iowa, 679 
Cleveland ▼. Bumham, 64 Wis. 847; Brewster t. Baxter, 2 Wash. 186 
Sauer ▼. Brinker, 77 Mo. 289; Bartlett ▼. Remington, 69 N. H. 864 
Mobberley ▼. Mobberley, 60 Md. 876; Barkley ▼. Tanant^ 20 a a G74 
Nntt ▼. fiumphrqr, 82 Kana. 100. 



CJhap. L § 8. RULES RELATING TO EVIDENCB. 

have judicial k^iowledge of the subject-matter;* and ari- 
dence has been invariably allowed to identify it." ^ 

To show application of phrase. — Explanation of termB 
may be an explanation of some word not describing the 
subject-matter of the contract, but the amount and char- 
acter of the responsibility which one of the parties takes 
upon himself as to the conditions of the contract. Where 
a vessel is warranted ^^ seaworthy/' a house promised to be 
kept in ''tenantable" repair, a thing undertaken to be done 
in a *' reasonable " manner, evidence is admissible to show 
the application of these phrases to the subject-matter of 
the contract^ and so as to ascertain the intention of the 
parties. 

In Burges v. Wickhamf a vessel called the Ganges, in- 
tended for river navigation upon the Indus, was sent upon 
the ocean voyage to India, having first been temporarily 
strengthened so as to be fit to meet the perils of such a 
voyage. Her owner insured her, and in every policy of 
marine insurance there is an implied warranty by the in- 
sured that the vessel is '^seaworthy." The Ganges was not 
seaworthy in the sense in which that term would be ordi- 
narily applied to an ocean-going vessel, but her condition 
was made known to the underwriters, and though the ad- 
v<^nture was more dangerous than an ordinary voyage to 
India, there appeared to be a reasonable probability of its 
being brought to a safe ending. At any rate, the under- 
writers took the risk in full knowledge of the facts. The 
Gkknges was lost, and the owner sued the underwriters; they 
defended the action on the ground that the vessel was unsea- 
worthy in the ordinary sense of the word as applied to an 
ocean voyage, and maintained that evidence could not be ad- 

«. MaodOBiiM T. Loi«bottoai, 1 KL A KL ITT. 

1 Barrett ▼. Murphy, 140 Maas. 188; ThomeU ▼. Brockton, 141 Maas. 
161; Home V. Chatham, 64 Tex. 86; Robinaon ▼. Douthit, 64 Tex. 101; 
I^rman ▼• Qedney, 114 Di. 888; Baker ▼• KcArthur. 54 Mich. ISO 
Thfipiinn ▼. Stewart, 60 la. 233. 



824 INTERPRETATION OF CONTRACT. PtatrT 

mitted to show that, with reference to this particular 
[^^7] vessel and voyage, the term was understood *in a 
modified sense. It was held that such evidence was 
admissible. The grounds on which it was admissible are 
stated by Blackburn, J., in a judgment which explains the 
rule with the utmost clearness: — 

" It is always permitted to give extrinsic evidence to ap- 
ply a written contract, and show what was the subject- 
matter to which it refers. When the stipulations in the 
contract are expressed in terms which are to be understoodi 
as logicians say, not nmpliciter^ sed secundum quid^ the ex- 
tent and the obligation cast upon the party may vary greatly 
according to what the parol evidence shows the subject- 
matter to be; but this does not contradict or vary the 
contract For example, in a demise of a house with a cov- 
enant to keep it in tenantable repair, it is legitimate to 
inquire whether the house be an old one in St Giles's or a 
new palace in Grosvenor-square, for the purpose of ascertain- 
ing whether the tenant has complied with his covenant; 
for that which would be repair in a house of the one class 
18 not so when applied to a house of the other (see Payne v. 
Hdine).^ So, suppose a sale of a horse warranted to go well 
in harness; the qualities necessary to constitute a good goer 
in harness would be different in a pony fit to draw a lady's 
carriage or a dray-horse; or in a lease of Whiteacre for a 
year with an express contract to cultivate it in a proper 
manner, the quantity of labour and manure which the tenant 
would have to bestow must be dififerent according as White 
acre consists of hop gardens or meadows. In each of these 
oases you legitimately inquire what is the subject-matter oi 
the contract, and then the terms of the stipulation are to 
be understood, not simplicUef'j but secundum quid. The 
two last instances I have supposed are not, as far as I know, 
decided cases; but I give them to explain my meaning as 
examples of a general rula Now, according to the vie^ 
idready expressed, seaworthiness is a term relative to the 

«.l#lLaW.ML 



Chap. L §8. RULES BELAima TO EVIDENGB. IN 

natare of the adventure, it is to be understood, not dmpU^ 
iteTy but secundum quid.V * 

Cases of the sort we have just described are called 
cases of ^latent ambiguity, and are sometimes dis- [*248] 
tinguished from patent ambiguities, where words 
are omitted, or contradict one another; in such cases ex> 
planatory evidence is not admissible. Thus, where a bill 
of exchange was drawn for ^^ two hundred pounds '' but the 
figures at the top were ^^ 245," evidence was not admitted 
to show that the bill was intended to be drawn for tlie 
larger amount^ 

(tf) Usage to annex Incidents* — Evidence is admissible of 
the usage of a trade or a locality which may add a term to 
a contract, or may attach a special and sometimes non- 
natural meaning to one of its terms.^ As an instance of a 
usage which annexes -a term to a contract we may cite the 
warranty of seaworthiness just mentioned, which by custom ' 
is always taken to be included in the contract of marine in* 
surance, though not specially mentioned. 

Similarly in the case of agricultural customs, a usage that 
the tenant, quitting his farm at Candlemas or Christmas, was 
entitled to reap the corn sown the preceding autumn, was 
held to be annexed to his lease, although the lease was un- 
der seal, and was silent on the subject/ 

The principle on which such usages are annexed is stated 
by Parke, B., in Ilutton v. Warrenf^ to rest on the " presump- 
tion that in such transactions the parties did not mean to 
express in writing the whole of the contract by which they 

<k BinvM T. Wiekham, 8 B. ft a 099. 
k SMMinrKW T. Ptper, 5 Bing. N. a 425u 
C Wtalflfwoffth T. Dalliwm 1 Sm. L. 0. OOSL 

€, lM.ftW.4M; aadaee Judgment of BUckbon, J^ In Mollstt t. BobinsoB, L. B. 1 
0. V. at p. \VL 

1 Foster ▼. Robinson, 6 Ohio St 90; Steamboat Albatross ▼. WayM^ 
16 Ohio St. 518 ; Lowe ▼. Lehman, 15 Ohio St. 179 ; Brown Ghemioal Oob 
▼• Atkinson, 91 N. C. 889; Everingham ▼. Lord, 19 Dl. App. 665; Petlsr 
▼• Morland, 8 Gush. 884; Wiloox ▼. Wood, 9 Wend. 846; Swift Iroo * 
1 Works ▼. Drnry, 87 Ohio St. 24a 



m$ INTEBPBETATION OF OONTRACrC. Fnrt IY« 

intended to be bound, but to contract with referenoe to 
those known usages.^ 

To explain phrases. — The admissibility of evidenoe of 
Bsage to explain phrases in contracts, whether commercial, 
agricultural, or otherwise subject to known customs, might 
be exemplified by reference to very numerous cases. The 
principle on which such explanation is admitted has been 
stated to be, ^' that words perfectly unambiguous in their 
ordinary meaning are used by the contractors in a different 
sense from that. In such cases the evidence neither adds to, 
nor qualifies, nor contradicts the existing contract; it only 

ascertains it by expounding the language." * 
[*249] *Thus in commercial contracts in the case of 
charter-parties in which the days allowed for un- 
loading the ship ^' are to commence running ^ on arrival ' at 
the ship's port of discharge, evidence may be given to show 
what is commonly understood to be the port Some ports 
are of large area, and by custom ^ arrival ' ^ is understood 
to mean arriving at a particular spot in the port" 

In like manner a covenant* by the lessee of a rabbit 
warren that he would leave 10,000 rabbits on the warren 
was explained by evidence of a usage of the locality that 
1,000 meant 1,200.* 

C Brown t. Byne* 8 K. ft B. 71& 

k. Per Coleridge, O. J., Norden Steam Co. t. Dempsef , 1 OL P. D. 6BBL 

A Smith T. WflBon, 8 B. ft A. D. 7S8. 

1 Smith T. Wilson has been foUowed in Soulier ▼. Kellerman, 18 Ma 
000, and is regarded as a leading case. Lawson on Usages and Customs^ 
p. 884. It is of doubtful authority, however. Hinton ▼. Locke. 6 Hill, 
488; Barlow ▼. Lambert, 28 Ala. 710; WUkinson ▼. Williamson, 76 Ala. 
163; Sweeney ▼. Thomason, Lea (Tenn.), 850. In the last case cited in a 
nit upon contract '* to pay $8 per thousand for brick in the wall,** the 
court declined to receive evidence that by usage the number of brick in 
a wall was to be ascertained by measurement and not by actual count 
** It would hardly be admissible to prove that, by custopi or usa^ of 
brick masons, 'one thousand' bricks means 'five hundred* or any 
number less than * one thousand.* " Abbreviated expressions and am- 
biguous phrases may be used with reference to some usage or custom, 
and in an action on a contract containing such terms, usage may be 
apvMkled to lo explain them; but as a rule, words of msnffiMil and <w* 



Ohap. L 8 8. RULES RELATING TO EVIDENCB. 827 

Closely oonneoted with the principle that usage may ex- 
plain phrases is the admissibility of skilled evidence to 
explain terms of art or technical phrases when used in doo> 
mnents* 

Conditions nnder which usage operates.— In order to 
affect a contract a nsage must be consistent with rules of 
law/ ^^A universal usage cannot be set up against the 
general law." And it must also be consistent with the 
terms of the contract, for it is optional to the parties to 
exclude the usage, if they think fit, and to frame their con- 
tract so as to be repugnant to its operation. 

Proved mistake a gronnd for refusing specific perform* 

ance. — In the application of equitable remedies, the grant- 
ing or refusal of specific performance, the rectification of 
documents or their cancellation, extrinsic evidence is more 
freely admitted. 

Thus, though, as we have seen, a man is ordinarily bound 
by the terms of an offer unequivocally expressed, and ao- 
cepted in good faith, evidence has been admitted to show 

•k HOls T. Btabo, 81 L. J. Ch. 4B7. 

k For Erie, a J., in M«7«r y. Drener, 16 a & N. a 640. 

tain import cannot be given an unnatural meaning. CaldweU ▼. Meek, 
17 lU. 229; Corwin ▼. Patch, 4 Cal. 204; Atkinson t. Allen, 29 Ind. 876: 
George ▼. Bartlett, 22 N. H. 496; Hedden ▼. Roberts, 184 MaaSi 188; 
Qreenstone ▼. Burchard, 60 Mich. 484; Gibney ▼. Curtia, 61 Md. 192; 
Brown ▼• Foster, 118 Mass. 186; Lawson on Usages and Customs, p. 481 
Usage. — The intention of contracting parties cannot be shown byeyl- 
denoe of a nsage which is at yariance with the escpress terms of the ecm- 
tfxuit or repugnant to statutory law, Mansfield ▼. Inhabitants, 16 Gray, 
149; Gayzer ▼. Taylor, 10 Gray, 410; or against public poZicy, Raisin ▼• 
dark, 41 Md. 168 ; 20 Am. R. 66 ; or unreasonable and oppressive, Strong 
▼. Grand Trunk R. R. Ck>. 16 Mich. 206; Pennsylvania Coal Go. ▼. Sander- 
son, 94 Pa. St. 802. Many usages against the rules of the common law 
bare been sustained, but courts have frequently pronounced them in- 
Talid on the principle that no custom can be established which contra- 
venes the general rules of law. The principle admitting evidence of 
such usages is generally recognized, but in its application the author- 
ItiflB are conflicting. Dickinson v. Gay, 7 AUen, 29; Lawson on Ussfw 
and Customs, pp. 466-486. 



i» INTERPRETATION OF C»NTBACIL FtotIT 

that the offer waa made by inadyertenoe. An illnstratiom 
!■ afforded by the decision in Webster v. OeoiL^ A offered 
to X several plots of land for a round sum; immediately 
after he had despatched his offer he discovered that by a 
mistake in adding up the prices of the plots he had offered 
his land for a lower total sum than he intended. He in- 
formed X of the mistake without delay, but not before X 

had concluded the contract by acceptance. 
[*250] *0n proof of this, specific performance of the con- 
tract was refused, and X was left to such remedy 
by way of damages as the Common Law Courts might givft 
him.* 

Again, where a parol contract has been reduced to writ- 
ing, or where a contract for a lease or sale of lands has been 
performed by the execution of a lease or conveyance, evi- 
dence may be admitted to show that a term of the contract 
is not the real agreement of the parties. And this is done 
for two purposes and under two sets of circumstances. 

Sectlfieatlon of documents^ — Where a contract has 
been reduced into writing, or a deed executed, in pursuance 
of a previous agreement, and the writing or deed, owing to 
mutual mistake, fails to express the intention of the par^ 
ties, the Chancery Division will rectify the written instru- 
ment in accordance with their true intent This may be 
done even though the parties can no longer be restored to 
the position which they occupied at the time when the con- 
tract was made.* Should the original agreement be ambig- 
uous in its terms, extrinsic and, if necessary, parol evidence 
will be admitted to ascertain the true intent of the parties. 

But there must have been a genuine agreement {Maoken- 
wU V. Caidson):* its terms must have been expressed under 
mutual mistake (Fowler v. Fowler):* and the oral evidence, 
If the only evidence, must be uncontradicted. 

«. 10 Bmt. tt. 

a Webstar ▼. Oeefl, 10 Bmt. 61 

A Eari BMUiotaAmp t. Winn, L. B. 6 H. L. at p. 88S; Mnrrajr ▼. Fiutar, It 

A8Xq.l7S. 

«L4IxaJ.«L B —OMa i cited In PoUock,<W>.ira,t<L A- 



CJbap. L S 8. BOLES RELATING TO EVIDENCB. 811 

Correction of mistake which is not mntnal. — Where 
mistake is not mntnal, extrinsic evidence is only admitted 
in certain cases which appear to be regarded as having 
something in the character of Frand, and is admitted for 
the purpose of offering to the party seeking to profit by the 
mistake an option of abiding by a corrected contract, or 
having the contract annulled. Instances of such cases are 
Oarrard v. Frankd^ cited above, or Earru v. PepferdLf 
in which the mistake of the one party was caused by the 
other, though not with any fraudulent intent, and known 
to him before his position had been affected by the con- 
tract. 

It would seem that, in such cases, these corrective 
powers *are not used unless the parties can be placed [*251] 
in the same position as if the contract had not been 
made. 

The Judicature Act * reserves to the Chancery Division 
of the High Court a jurisdiction in " all causes for the reo- 
tification or setting aside or cancellation of deeds or written 
instruments." 



M. Seep IM 

i. ft Eq. L 

A aftA8rvici.e.as.|u. 



OHAPTEB n. 

Bales relating to Constmotlon. 

§ 1. General Bules. 

80 ftr w% iiave dealt with the admiaribility of eyidenoe 
in relation to oontraots in writing. We now come to deal 
with the roles of constrnction which govern the interpreta- 
tion of the contract as it is found to have been made be- 
tween the parties. 

(1) Words to be understood in their plain meaning.— 
The first role to lay down is that words are to be under- 
stood in their plain and literal meaning. And this rule is 
followed even though its consequences may not have been 
in the contemplation of the parties, subject always to ad- 
missible evidence being adduced of a usage varying the 
usual meaning of the words, and subject to the next mle 
which we proceed to state. 

(2) Subject to Inferenee of intention fh>m the whole 
document. — ^' An agreement ought to receive that construc- 
tion which will best efifectuate the intention of the parties 
to be collected from the whole of the agreement; " ^'Greater 
regard is to be had to the clear intention of the parties 
than to any particular words which they may have used in 
the expression of their intent** * 

These two rules would seem sometimes to be in conflict, 
but they come substantially to this; men will be taken to 
have meant precisely what they have said, unless, from the 
whole tenor of the instrument, a definite meaning can be col 
looted which gives a broader interpretation to specific words 
than their literal meaning would bear. The Courts will not 
make an agreement for the parties, but will ascertain what 



▼. Itaj^lt M. a W. 51T: ItadT. Baae^ 11 Q. & 



Ohap. n. S 3- BULES BELATINQ TO OONSTBUCTION. 

their agreement was, if not by its general purport, 

*then by the literal meaning of its words. Subsid- [*253] 

iary to these main rales there are varioos others, 

all tending to the same end, the effecting of the intention of 

the parties so far as it can be discerned. 

Subsidiary rules. — ^Thns Courts, both of Law and Equity, 
will correct obvious mistakes in writing and grammar. 

They will restrain the meaning of general words by more 
specific and particular descriptions of the subject-matter to 
which they are to apply. 

They assign to words susceptible of two meanings that 
which will make the instrument valid. Thus in Haigh v. 
Bro6k%^ a document was expressed to be given to the plaint- 
iffs '^ in consideration of your Jmng in advance ^' to J. S. It 
was argued that this showed a past consideration, but the 
Court held that the words might mean a prospective ad- 
vance, and be equivalent to '* in consideration of your &^ 
wming in advance," or ^^cn cotiditian of your being in 
advance." 

They will construe words most strongly against the party 
who used them. The principle on which this rule is based 
seems to be that a man is responsible for ambiguities in his 
own expression, and has no right to induce another to con- 
tract with him on the supposition that his words mean one 
thing, while he hopes the Court will adopt a construction 
by which they would mean another thing, more to his ad- 
vantage.^ 

% % RuUb of Law and EjuUy a$ to Time and PenaUies. 

There are two points of construction on which law and 
equity once differed though they differ no longer. These 
have reference to terms respecting time 2Jid penaltiee. 

Time — Of the essence of the contract at Common 
Law. — At law, ^^ time was always of the essence of the 
contract" If A made a promise to X whereby he under- 

kPwkMT ]laMkMlvAflKinuM»0«.I&AaaSpiML 



S82 INTBRPRETATION OF OONTRACT. Pixt H 

took to do a certain thing by a certain day in consideration 
that X would thereupon do something for him, X was dis- 
oharged from his promise if, by the date named in the con- 
tract, A^s promise was unfulfilled Equity howeyer 
[*254] looked further into the ^intention of the parties, so 
as to ascertain whether in fact the performance of 
the contract was meant to depend upon J.'s promise being 
fulfilled to the day, or whether a day was named in order 
to secure performance within a reasonable time. If the 
latter was found to be the intention of the parties, equity 
would not refuse to A the enforcement of JTs promise if 
his own was performed within a reasonable time. It is 
nevertheless open to the parties,* by express agreement^ to 
make time of the essence of the contract^ 

«. LannOB ▼. Rapper, t Soh. a L. 681 

1 Time is not so far of the cooonoe of the contract as to prevent its eo- 
foroement in equity within a reasonable time after the lapse of the time 
specifled. Moote ▼» Scriven, 88 ^Mich. 600; Maltby ▼. Austin, 66 Wi& 
687. The rule in the etatee generally, is, that while equity will not n- 
gard the time spedfled as of the essence of the contract, stiU thepartiei 
by express agreement may make it so, and in case they do, equity will 
not reliere the party in default Barnard ▼. Lee, 97 Mass. 83; Beedv. 
Braden, 61 Pa. St. 460; Qrey ▼. Tubbs, 48 OaL 869; BuUock ▼. Adams, 
6 a B. Greene, 871; Scott ▼. Folds, 7 Ohio, 90; Morgan ▼. Bergen, 8 
Keb. 809; Gregg ▼. Landis, 21 N. J. Eq. 494; Kemp ▼. Humphrey, M 
m. 88. In Michigan a stipulation in the contract that " time is declared 
to be of the essence of this contract ** is of little force. Equity may 
disregard it Time cannot be made essential in a contract, merely by 
iO declaring, if it would be unconscionable to allow it.** Richmoiid 
T. Robinson, 18 Mich. 801; KimbaU t. Goodbum, 82 Mich. 10; Cole?. 
Wells, 49 Mich. 468. And in other states the same result is accomplished 
by the courti finding a waiver of the stipulation on Tory slight eri> 
denoe. Whether specific performance wiU be decreed depends in a 
great measure upon judicial discretion; and the fact that parties hsv* 
made time of the essence of their contract does not necessarily predade 
the courts from granting relief against such a provision, where it is in 
the nature of a penalty, or the circumstances render it inequitable to es- 
force the forfeiture. Pomeroy on Contr. sea 891 ; Quinn ▼. Boath, t 
Conn. 16; 0*F^en ▼• Kennedy, 45 Mo. 127; BaUard T. Cheney, ItNeh 
68; Thayer t. Wilmhigton Starr liinmg Ga 106 DL 640; AaatiB t 
Waoki,80Miiui.886;Baraolou t. Newton. 68 OO. 881 



n. § 8. RULES RELATING TO CX>NCrrRnCTION. Ol 

The distinction between the roles of law and equity in 
this respect is now swept away by the Judicature Act,' 
which enacts that 

^ Stipulations in contracts as to time or otherwise, which 
would not before the passing of this Act have been deemed 
to be, or to have become of the essence of such contracts 
in a Court of Equity, shall receive in all Courts the same 
construction and effect as they would have heretofore re- 
ceived in equity." 

Penalties; general principle governing rules. — We 
have had occasion to note in the case of Bonds and Mort-. 
gages the attitude of the Equity Courts towards an agree- 
ment which imposes on one of the parties, for a breach of 
aU or any of its terms, a loss in money or property dis- 
proportionate to the objects which the agreement was in- 
tended to effect And for a long time past Courts of Law 
have taken a similar view of the subject.^ 

The question of construction is of this kind. Where the 
parties afl&x a penalty to the non-performance of his promise 
by one, or each of them, they may have intended to effect 
either of two purposes; to assess the damages at which 
they rate the non-performance of the promise, or to secure 
its performance by the imposition of a penalty in excess of 
the actual loss likely to be sustained. 

Penalty and liquidated damages.— If the former wai 
their intention, the sum named is recoverable as 
^liquidated damages."* If the latter, the amount *re- [*25f 
ooverable is limited to the loss actually sustained, in 
spite of the sum undertaken to be paid by the defaulter. L 
construing contracts in which such a term is introduced, thi 
Courts will not be guided by the name given to the sum tc 
be paid. If it be in the nature of a penalty they will not 

<k as* tr Viet e. OB. laS, taM?. 

k. Liquidated duoMgm are ** the ram agreed upon in Hie cootnel by Hie peitlai 
tkemaelTee ee the dAmegee for a breech of it.** UnliqukUtted dunagee are wch ae eve 
left to be iwiiBiwi bj a Jwy aoeording to the loei auatataed. Bullen A Lfake. Frae. «( 
,188L 



>TaylM V. Sandiford, 7 Wheat 18; Watts t. Coniion, 116 U. a 1 



^34 IMTEBPRETATION OF CONTRACT. Fttt It 

ftllow it to be enforced although the parties have expresBlj 
stated that it is to be paid as liquidated damages and not as 
a penalty.' 

^ Kemble t. Farren has been generally followed, and ia cited appror- 
ingly in Whitefield v. Levy, 85 N. J. L. 149; Shiel ▼. McNitt, 9 Paige, 
101; Niver ▼. Roesman, 18 Barb. 50; Perkina ▼. Lymann, 11 Maaa. S3, 
note; MOTse ▼. Rathburn, 42 Mo. 598; Berry t. Wiadom, 8 Ohio St, 844, 
and to the same effeot are Curry ▼. Larer, 7 Pa. St 470; ShriTe ▼ 
Brereton, 51 Pa. St. 175; Heatwole ▼. Gorrell, 85 Kans. 097; Bradstreet 
▼. Baker, 14 R L 546; Penny backer ▼. Jones, 106 Pa. St 937; Lansing 
▼. Dodd, 45 N. J. L. 535; Daily t. Litchfield, 10 Mich. 99; Trustees ▼. 
Wahrath, 97 Mich. 239 ; Daniel ▼. Brown, 54 Ma 468. But the case has 
not passed without criticism. Brewster v. Edgeriey, 18 N. H. 275; Pierce 
7. Jung, 10 Wis. 30; Clement ▼. Cash, 91 N. Y. 253; Jaoqueth ▼. Hud- 
son, 5 Mich. 124. In Jaoqueth v. Hudson, Christiancy, J., held that the 
inquiry in this class of cases was whether the principle of just compen* 
sation had been violated; ** not what the parties intended, but whether 
the sum is, in fact, in the nature of a penalty : and this is to be deter- 
mined by the magnitude of the sum, in connection with the subject- 
matter, and not at aU by the words or the underetanding of the partiea 
The intention of the parties cannot alter it** Johnston ▼. Whittemore, 
97 Mich. 468; Myer ▼. Hart, 40 Mich. 528. In Myer ▼. Hart» Marstoo, 
J., said : " Parties contracting are not permitted to stipulate and fix ths 
measure of damages that shaU be recovered in case of a breach of the 
contract, grossly in excess of what the damages should actuaUy appear 
to be. Just compensation for the injury sustained is the principle at 
which the law aims, and the parties will not be permitted, by e xproo s 
stipulation, to set this principle aside." This leads up to the conclu- 
sion that, in any case, if the sum agreed upon by the parties, as stipu- 
lated damages, shocks the conscience of the court, the jury will be 
asked to afford relief by assessing the actual damages sustained. Beal 
▼. Hayes, 5 Sandf. 640; Cotheai ▼. Talmage, 9 N. Y. 551; CaldweU t. 
Lawrence, 88 N. Y. 71. Upon this subject there are many contradictory 
decisions, and various rules have been suggested to assist in arriving at 
the intention of the contracting parties. The rules stated in the text 
have been generaUy followed in this country and are perhaps suffident 
at this time. There would be less call for false reasoning, regarding the 
meaning of the terms *' liquidated damages ** and ** penalty " in cod- 
tracts, in cases where there is not the slightest doubt as to what the par- 
ties intended, if the practical results of the decisions were announosd 
aa correct conclusions of law ; that penalties are left to the state, where 
the power of punishment belongs, to be inflicted on its citixena for 
breach of statutory duty, and stipulated damages were to aerre their 
porpoae in the oompromiae of axialing causea of action, while agiM- 



Ohap. n. 1 1 BtTLES RELATINQ TO CX)NBTBUCrn01i t80 

For determining this qnestion of oonstniction the follow- 
ing roles may be laid down. 

If the contract is for a matter of certain value and a sum 
18 fixed to be paid on breach of it which is in excess of that 
▼alne, then the sum fixed is a penalty and not liquidated 
damages. 

If the contract is for a matter of uncertain value and a 
sum is fixed to be paid on breach of it, the sum is recover- 
able as liquidated damages. There is '^nothing illegal or 
unreasonable in the parties, by their mutual agreement, 
settling the amount of damages, uncertain in their nature, 
at any sum upon which they may agree." * 

And if a debt is to be paid by instalments it is no penalty 
to provide that on default of any one payment the entire 
balance of unpaid instalments is to fall due.^ 

If the contract contains a number of terms some of which 
are of a certain value and some not, and the penalty is ap- 
plied to a breach of any one of them, it is not recoverable 
as liquidated damages, however strongly the parties may 
have expressed their intention that it shall be so. 

Thus in KemUs v. Farrtn^ the defendant agreed to act at 
Covent Garden Theatre for four consecutive seasons and to 
conform to all the regulations of the theatre, and the plaint- 
iff promised to pay the defendant £3 6«. &/. every night, 
during that time, that the theatre should be open for per- 
formance, and to give him one benefit night in each season. 

«b For Tindal, 0. J., In Kembto ▼. Furea. 

i. Protoetor Lou 0«. T. OrkM, 5 Q. & D. (a A.) fiOi 

menta whereby parties attempt to anticipate the damages which may 
■rise from the breach of an execatoxy contract are condenmed as nn- 
oonacionable and against the policy of the law. This wonld be a start- 
ling innoration upon established principles, bat no more so than the 
practioe of snbmitting to the jurj to find not what the contract was, 
bat what it ought to haTs been under the circumstances; and that, tfto, 
ondar the pretense that, thoogh the language be erer so dear and 
strong, " the parties must be considered as not meaning eooMstij what 

th^SBX." 



83R INTERPRETATION OF CONTRACT. Pfert IV 

It wai farther agreed that for a breach of any term of 
this agreement by either party, the one in defaoll 
[*856] should pay the *other £1,000, '' to which sam it was 
thereby agreed that the damages sustained by sach 
omissioD, neglect, or refusal, should amount; and which snm 
was thereby declared by the said parties to be liquidated 
and ascertained damages and not a penalty or penal snm or 
in the nature thereof." The defendant refused to act dor 
ing the second season, the jury put the damages for hib 
breach of contract at £750, and the plaintiff moved for k 
rule to raise them to £1,000. 

But the Court held, that in spite of the explicit statemeni 
of the parties that the sum was not to be regarded as ib 
penalty, it must be so regarded. If the penal clause had 
been limited to breaches uncertain in their nature and 
amount, it might, as was thought, have had the effect of 
ascertaining the damages, for the reason above cited. " But," 
said Tindal, 0. J., *' in the present case the clause is not so 
confined; it extends to the breach of any stipulation bj 
either party. If, therefore, on the one hand, the plaintiff 
had neglected to make a single payment of £3 6s. 8d. per 
day, or on the other hand, the defendant had refused to con- 
form to any usual regulation of the theatre, however minute 
or unimportant, it must have been contended that the clause 
in question, in either case, would have given the stipulated 
damages of £1,000. But that a very large sum should bo- 
come immediately payable, in consequence of the non-pay- 
ment of a very small sum, and that the former should not 
be considered as a penalty appears to be a contradiction in 
terms ; the case being precisely that in which courts of equity 
have always relieved, and against which courts of law have, 
in modem times, endeavoured to relieve, by direct<ng juries 
to assess the real damages sustained by the breach of the 

cement'' 



PART Y. 

DISCHABGE OF CONTRACT. 

Dincliarge of eontract. — We have now dealt with the 
elements which go to the formation of Contract, with the 
operation of Contract when formed, and with its interpret 
tation when it comes into dispute. It remaios to consider 
the modes in which the contractual tie may be looked, and 
the parties wholly freed from their rights and liabilities un- 
der the contract And in dealing with this part of the 
subject it will be proper to consider, not merely the mode 
in which the original contract may be discharged, but, in 
case of its being discharged by breach, the mode in which 
the right of action arising thereupon may be extinguished. 
How elTeeted. — The modes in which a contract may be 
discharged would seem to be these. 

(a) Agreement — It may be discharged by the same pro- 
cess which created it, mutual agreement. 

09) Perfomumce. — It may be performed; and all the 
duties undertaken by either party may be thereby fulfilled, 
and all the rights satisfied. 

{j) Breach. — It may be broken; upon this a new obliga- 
tion connects the parties, a right of action possessed by the 
one against the other. 

S) Impoeethility. — It may become impossible by reason 
of certain circumstances which are held to exonerate the 
parties from their respective obligations. 

(t) Operation of law. — It may be discharged by the oper> 
ation of rules of law upon certain sets of oircumstanceSi to 
be hereafter mentioned. 
Jtt 



CHAPTER L 
Discharge of Contract by Agreement. 

Forms of discharge by agreement. — We have often 
noted, as the essential feature of the contractual obligation, 
that it is the result of the voluntary act of the parties, ex- 
pressed by their agreement. As it is their agreement which 
binds them, so by their agreement they may be loosed. 

And this mode of discharge may occur in one of three 
forms: waiver; substitute agreement; condition subsequent. 

§ 1. Wwi/ver. 

Waiver. — A contract may be discharged by express 
agreement that it shall no longer bind either party. This 
process is called a waiver, cancellation, or rescission of the 
contract. 

An agreement of this nature is subject to the rule which 
governs all simple contracts, with regard to consideration. 
And the consideration for the promise of each party is the 
abandonment by the other of his rights under the contract. 
The rule, often stated, that ^' a simple contract may, before 
breach^ be waived or discharged, without a deed and with- 
out consideration," ' must be taken to mean that, where the 
contract is eoDecutoryj no further consideration is needed foi 
an agreement to rescind, than the discharge of each party 
by the other from his liabilities under the contract^ 

a. BylM OD BlUfl, 197. 

1 <* An agreement to waive a claim for damages after it has fully ao- 
erued, nothing remaining to he done, would be without oonsideration ; 
but it is not thus where something is still to be done, and is only per- 
formed in oonsideration of such waiver. ** Moore ▼. Detroit LocomotiTO 
Works, 14 Mich. 266. See supra, *81, note. In an executory contract 
the release of each party is a sufficient oonsideration for the waiTOE. 
KeUy ▼. Bliss, M Wia. 187. 



Chap. L S 1. BY AGREEMENT. 839 

Mere wafyer of contractual rights iiiTaHd.— There 
seems to be no authority for saying that a contract, eze> 
cuted upon one side, can be discharged before breach, with- 
out consideration ; that where A has done all that he was 
bound to do and the time for X to perform his promise has 
aofc yet arrived, a bare waiver of his claim by A would be 
an efFectual discharge to X' 

*In fact, English law knows nothing of the aban- [*259] 
donment of such a claim, except by release under 
seal, or for consideration. iThe plea of ^' waiver " * under 
the old system of pleading was couched in the form of an 
agreement between the parties to waive a contract, an 
agreement consisting of mutual promises, the consideration 
for which is clearly the relinquishment of a right by each 
promisee. Where a discharge by waiver is alleged as a de- 
fence in an action for breach of contract, the cases tend to 
show that the defendant must set up, in form or substance, 
a mutual abandonment of claims, or else a new considera- 
tion for the waiver. 

In King v. OiUetty* the plaintiff sued for breach of a 
promise of marriage; the defendant pleaded that before 
breach he had been exonerated and discharged by the plaint- 
iff from the performance of his promise. The Court held 
that the plea was allowable in form; ^'yet we think," said 
Alderson, B., ^^ that the defendant will not be able to suc- 
ceed upon it, • • • unless he proves a proposition to es^ 
onerats on ths pa/rt of the plaintiffs acceded to by himself; and 
this in effect will be a rescission of the contract." 

In Dobson v. Espie^ the plaintiff sued the defendant for 
non-payment of deposit money due upon a sale of land. 
The defendant pleaded that, before breach of his promise 
to pay, the plaintiff had given him leave and license not to 
pay. The Court held that such a plea was inapplicable to 

a.«BallMi Sl Leaka* Pireo. of Pleadings, Til WaItw; 

k 7 H. A W. 85. 

iiiB.JtN.79. 

ifletift. 980.11. 



$40 DISCUAUUE OK OONTRACr. FutT 

a Buit for the breach of a contract, and that the defendant 
should have pleaded an exoneration and discharge; bat it if 
difficult to see why ihe pleader should not have adopted the 
latter form of plea, unless it were that (according to the 
reasoning of Alderson, B., in King v. QiUett) an exoneration 
means a promise to exonerate^ which like any other promise 
needs consideration to support it. It is clear that in Dobson 
9. Espie the plaintiff was to obtain nothing for his alleged 
waiver; neither the relinquishment of a claim, nor any 
fresh consideration. 

Finally, we have the express authority of Parke, 
[♦260] B., in ^Foster v. Dawher^ for saying that an executed 
contract, i. e. a contract in which one of the parties 
has performed all that is due from him, cannot be dis- 
charged by a parol waiver. But this case illustrates an- 
other feature of the matter under discussion, to which we 
will now proceed. 

PeculiarHf of bills of exchange and promissory notes. 
To the general rule which we have laid down there is an 
important exception in the case of bills of exchange and 
promissory notes. The rights of the holder of such instru- 
ments may be waived and discharged without any consid- 
eration for their waiver. The point arose in the case of 
FoHter V. Datober. The plaintiff was the executor of one 
•/. C,y to whom the defendant had given promissory notes 
for £1,000 as security for a loan of that amount. After- 
wards «/. C. had given the defendant a discharge for the 
promissory note. It was held that the discharge, though 
unsupported by consideration, was valid.^ 

«. 6 Bzch. 889. 

1 Parol waifer— Foster?. Dawber.— By the weight of American au- 
thority bille of exchange and promissory notes present no exception to 
the general rule that a cause of action cannot be diaoharged by a parol 
waiver, unsupported by any consideration. The caae of Foster ▼. 
Dawber is not followed to that extent by our courts. Crawford ▼. 
liillspaugh, 18 Johns. 87 ; Seymour ▼. Menham, 17 Johns. 189 ; Smith 
T. Bartholomew, 1 Met. 276; Myers ▼. Byington, 34 la. 205; 2 Pan. N. 
ft B. 285. It ia sometimes said that the holder of a biU of exohanfB 



Chap. I. St. BY AGREEMENT. Ml 

The Court said, ^ It is competent for both parties to an 
exeoatory contract, by mutual agreement, without any sat- 
isfaction, to discbarge the obligation of that contract. But 
an executed oantract cannot he diaeharged except by a release 
under eealy or by performance of the obligation^ as by pay- 
ment, where the obligation is to be performed by payment. 
But a promissory note or a bill of exchange appears to stand 
on a different footing to simple contracts. . . • The 
rule of law has been so often laid down and acted upon, 
although there is no case precisely on the point as between 
immediate parties, that the obligation on a bill of ex- 
change may be discharged by express waiver, that it is too 
late now to question the propriety of that rule." 

And it was further held that the rule as to bills of ex- 
change, originating in the law merchant by which those 
instruments are almost entirely governed, would apply to 
promissory notes which derive their negotiable character 
from statute. The statute 3 & 4 Anne, c. 9, makes the same 
law applicable to both instruments. 

*§ 2. Substituted Contract. [*261] 

Substituted contract, how different Trom waiver. — A 

contract may be discharged by an alteration in its terms 

nay by parol waiver discharge the acceptor. The true ground is that a 
•waiver works by way of estoppel rather than by way of contract, and 
is effectual only when the holder*s renunciation of his rights has induced 
the acceptor to part with funds or change his condition so that it would 
be inequitable to enforce the contract of acceptance. 1 Pars. N. & B. 
8S6y n. ; 1 DanL Neg. Inst. sec. 544. But a surrender of the obligo' 
tion, bill or note, with the intent and for the purpose of discharging 
the debt, and without fraud or mistake, operates in law as a discharge 
of the liability thereon; nor is any consideration required to support 
such a transaction when it has been fully executed. Vanderbeok t. 
Vanderbeck, 80 N. J. Ek). 270; In re Campbeirs Estate, 7 Pa. St 100; 
Albert T. Ziegler, 29 Pa. St. 50; Beach ▼. Endrees, 61 Barb. 670; Doty 
?. Wilson, 6 Lans. 10; Larkin t. Hardenbrook, 90 N. Y. 884. Thesa 
authoritieB also support the proposition that a mere parol release of a 
debt without consideration is Toid« There muat be a surrender to tlis 
debtor of the eTidenoe of the debfe^ 



843 DISCHARGE OF OONTRACT. PirtV 

which, in effect, substitutes a new agreement for the old 
one. The difference between this and the first-mentioned 
mode of discharge by agreement lies in the fact that the 
first is a total obliteration of the contract, the second is a 
substitution of a new bond between the parties in place of 
the old one. 

Hay be an Implied discharge.— And it operates as a 
rescission in this way, that if it does not in terms express 
an intention that the original contract should be waived, it 
indicates such an intention by the introduction of new 
terms or new parties. The change of rights and habilities, 
and consequent extinction of those which before existed, 
forms the consideration on each side for the new contract 

But the Implication must be clear. — But the intontion 
to discharge the original contract must distinctly appear, 
from the inconsistency of the new terms with the old ones. 
If there be a mere postponement of performance, for the 
convenience of one of the parties, the contract is not 
thereby discharged. 

How different from postponement of performanee.— 
The question has often arisen m contracts for the sale and 
delivery of goods, where the delivery is to extend over 
some time. The purchaser requests a postponement of de- 
livery, then refuses to accept the goods at all, and then 
alleges that the contract was discharged by the alteration 
of the time of performance; that a new contract was thereby 
created, and that the new contract is void for non-com- 
pliance with the 17th section of the Statute of Frauds.* 

But the Courts have always recognized 'Hhe distinction 

1 To what extent a written contract, required to be in writing under 
the Statute of Frauds, may be modified by a subsequent oral agreement, 
is a serious question, and the authorities are conflicting. In Swain v 
Seamans, 9 Wall. 273, Clifford, J., said : <* The better opinion is that a 
written contract falling within the Statute of Frauds cannot be varied 
by any subsequent agreement of the parties, unless such new agreemeDt 
is also in writing;'* and the majority of cases support this view. 
Browne on Stat, of Frds. 411; 1 Benj. on Sales* sea 215; S Bead on 
Stat, of Frds. sec. 458. 



Cbmp. LSI BY AGBEMENT. 848 

between a sabstitation of one agreement for another, and 
a Toluntarj forbearance to deliver at the request of an- 
other/" and will not regard the latter as affecting the 
rights of the parties farther than this, that if a man asks 
to have performance of his contract postponed, he does so 
at his own risk. For if the market valae of the 
goods which he should have 'accepted at the earlier [*262] 
date has altered at the latter date, the rate of dam- 
ages may be assessed, as against him, either at the time 
when the performance should have taken place, and when 
by non-performance the contract was broken, or when he 
oltimately exhausted the patience of the vendor, and defi» 
nitely refused to perform the contract* 

The contract is discharged by alteration of its terms* 
when (a) what is to be done is so far altered as to be incon* 
sistent with it and to amount to a new contract, or {b) when 
a new party is substituted for a previous one by agreement 
of all three. 

(a) Snbstltnted terms. — A good illustration of the first 
of theae modes of discharge is afforded by the case of 
ThomhiU V, IfecUs.* A undertook certain building opera- 
tions for X, which were to be completed by a certain date, 
or a sum to be paid as compensation for delay. While the 
building was in progress an agreement was made between 
the parties for additional work, by which it became impos> 
sible that the whole of the operations should be concluded 
within the stipulated time. It was heid that the subsequent 
agreement was so far inconsistent with the first, as to 



I T. Hajnet, L. a 10 a P. 600. 

k Wlllea. Jm in givinc judgmeni in ih» Exchequer Chamber In the caso of Ofie «, 
Sari V«M» L. B. 8 Q. B. ^ holds tiiat by (he forbearanoe on the part of the plalntUK, 
al Cte lequaat of the defendant, to Instst upon deliTeiy of the goods at «nd after tim 
tfane for the performanoe of the oontraot, an agreement aroae which, though for waoi 
•f OQMldflration for the forbearance it oould not furnish a cause of action, was neT«»> 
thfltoM capable of affecting the measure of damages. He calls it an Accoid wlthoni 
a Satliteolkia. As to the nature of Accord and Satisfactioii, see Fan V, eh. HI, 1 4 (,«|k 

«L0glaT.BariVsM,U&8Q.&S»; Ua.t <).&>». 



144 DISCEUBOE OF CONTRACT. Plut > 

amount to a waiver of the sum stipolatod to be paid for 
delay.* 

(b) Substituted parties. — A contract may be discharged 
by the introduction of new parties into the original agree- 
ment, whereby a new contract is created, in which the 
terms remain the same but the parties are different.' 

This may be done eitlier by express agreement such as 
was described m a previous chapter, or by the conduct 
of the parties, indicating acquiescence in a change of lia- 
bility. 
[*263] *If A has entered into a contract with Xand 21 
and JT and JU agree among themselves that if shall 
retire from the contract and cease to be liable upon it, A may 
either insist upon the continued liability of My or he may 
treat the contract as broken and discharged by the rennn- 
oiatiun of his liabilities by one of the parties to it. 

If however A, after he becomes aware of the retirement 
of Jffrom the contract, continues to deal with Xas though 
no change had taken place, he will he considered to have 
entered into a new contract to accept the sole liability of 
X, and will not be entitled to hold JI to his original con- 
tract. 
^ The case of Hart * v. Alexander * illustrates this rule. The 

•.ilLAW.484. 

1 Howard ▼. Wilrainj^on. etc. R R. Co. 1 Gill (Md.i, 811; Munford t. 
WilflOD, 15 Mo. 640: Stewart v. Keteltafl. S6 N. T 888; Reed ▼. McOrew, 
i Ohio, 876; Rogers ▼. Rogen», 189 Mass. 440: Church ▼. Florence Iron 
Works, 46 N. J. L. 129: Norton v. Browne, 89 Ind. 833; Chrisoian t. 
Hodges, 76 Mo. 413; MaxweU t. Qraves, 69 la. 613. 

•Bjrd ▼. Bertrand, 7 Ark. 821; Utchfleld ▼. Qarrett, 10 Mich. 426; 
Moore t. Fowler, 1 Hem pot. 686. 

* Hart T. Alexander.— The case cited by the author is in conflict with 
some earl J English cases, such as Lodge t. Dicas, 8 B. & Aid. 611 : 
DaTid T. EUice, 6 B. ft C. 196, which were followed in Gole ▼. Sackett, 
1 Hill, 616; WaydeU ▼. Luer, 6 HiU, 448; Frentress ▼. Markle, 8 Greene 
Oiu), 666; WUdes t. Fessenden, 4 Met. 12. In WaydeU t. Luer, Oowen. 
i^alroDgly disapproTed of Hart t. Alexander, and held thai the glTing 



Chap. L S 2. BY AGREEMENT. Mi 

plaintifiF employed the defendant with other members of a 
firm as his bankers; the defendant retired; notice, in va- 
lions forms, of his retirement was shown to have reached, 
or to have been accessible to, the plaintiff, who nevertheless 
oontinaed to bank with the firm. Finally, the firm became 
bankrupt; the plaintiff saed the defendant as liable to him 
upon the original contract, as being one of the members of 
the firm whom he had retained as his bankers. The jary 

of a promisfiory note by one of MTeral partners or joint debtors for a 
demand antecedently due from all, would not extinguish their liability, 
though the creditor expressly accepted the note in satisfaction; that 
the partners being liable in 9olido for the debt, the promise of one to 
pay the debt was no oonsideration for the creditor's promise to release 
the other. The case of Waydell y. Luer came before the court of errors 
inSDenio, 410, 417, and the decision of Co wen, J., was reversed, and the 
case of Hart v. Alexander followed to the extent of holding that the 
note of one of the members of the firm was a new security expressing 
an obligation unlike that arising out of the original contract, and waa 
BufScient oonsideration for the discharge of the other members of the 
firm. And the weight of American authority is to the samo effect. 
Livingstone v. Radcliff, 6 Barb. 201; Millard t. Tliorne, 56 N. Y. 402, 
PoweU ▼. Charless, 84 Mo. 485; Very v. Levy, 18 Hun, 485; Maxwell t. 
Day, 45Ind. 509; Stone y. Chamberlain, 20 Oa. 259; Bank t. Green, 41 
Ohio St. 481; 1 Smith's Lead. Cas. 456; 2 Am. Lead. Cas. (5th ed.) 278; 
LaFargey. Herton, 11 Barb. 171; Luddington v. Bell, 77 N. Y. 141; 
Maier y. Canavan, 8 Daly, 272. But the note or other security must be 
received with the intention that it shaU satisfy the original obligation, 
or it will not effect a discharge, and the intention of the parties in this 
regard is a question of fact for the Jury. Gates v. Hughes, 44 Wis. 882. 
The creditor's promise to discharge one of several joint debtors or part- 
ners must be supported by some oonsideration ; some advantage gained 
by the creditor, or some prejudice suffered by the promisee. The simple 
promise of a creditor to look to one of two or more joint debtors for his 
pay is ntidtiifi pcustum. In the case cited the individual note of the 
debtor was considered as a new security which might be received as 
collateral to or in discharge of the original indebtedness according to 
the intention of the parties ; but when on the dissolution of partnership 
one member agrees to pay the liabilities of the firm, and as creditor 
assents to such an arrangement, and promises to discharge the retiring 
member, such promise of the creditor is not binding unless something 
has been done, or some rig^hti^ have been lost on the strength of such 
promise to the prejudice of the promisee. Malstrom v. Hoploiia, lUS 
Fi. St. 118; Ea4^ Manuf. Ok v. Jennings, 29 Kan. 657. 



146 DISGHABGE OF OONTRACTT. F^ T. 

ttmnd that the defendant's retirement was suflBciently 
broaght to the notice of the plaintiff, and, as he had still 
continued to employ the firm, the Conrt held that a new 
contract bad been formed between the plaintiff and its re- 
maining members. " I apprehend the law to be now set- 
tled," said Parke, B., " that if one partner goes out of a 
firm and another comes in, the debts of the old firm may 
by the consent ot all the three parties — the creditor, the 
old firm, and the new firm — be transferred to the new firm/* 
Thus a change of liabilities, accepted by the plaintiff, re- 
scinded the original contract by the creation of a new one 
to which the defendant was not a party. 

§ 3. Provisions for Discharge. 

A contract may contain within itself the elements of its 
own discharge, in the form of express provisions 
[*26'4] for its *determination under certain circumstances. 
These circumstances may be the non-fulfillment of a 
specified term of the contract; the occurrence of a particu- 
lar event; or the exercise by one of the parties of an option 
to determine the contract. 

Discharge optional on non-falflllment of a term. — la llio 
first of these three cases, that in which the non-fulfillment 
of a specified term of the ontract gives to one of the parties 
the option of treating the contract as discharged, we seem 
to be approaching very near to the subject of the discharge 
of contract by breach. For this too may arise from the 
non-fulfillment of a term which the parties consider to be 
\ital to the contract. 

But there is a marked difference between a non-fulfillment 
contemplated by the parties, the occurrence of which shall, 
it is agreed, make the contract determinable at the option 
of one, and a breach^ or non-fulfillment not contemplated or 
provided for by the parties. In the one case the parties 
have, in the other they have not looked beyond the imme- 
diate objects of the contract : in the one case the default 



Chaik. L 8 3. BY AGREEMENT. 847 

which is to constitate a discharge is specified by the agree- 
ment of the parties ; in the other it must always be a qnes- 
tion of fact or of construction whether or no the default 
was in ^ matter vital to the contract, so as to operate as a 
discnarge by breach. ^ 

A good illustration is afforded by the case of ffead v. 
TattersaW^ of such a condition, or provisional discharge of 
a contract introduced into its terms.^ 

A bought a horse of X. The contract of sale contained, 
among others, these two terms: that the horse was war- 
ranted to have been hunted with the Bicester hounds, and 
that if it did not answer to its description the buyer should 
be at liberty to return it by the evening of a specified day. 
The horse did not answer to its description and had never 
been hunted with the Bicester hounds. It was returned by 
the day named, but as it had in the meantime been 
injured, *though by no fault of J., X disputed the [♦266] 
right of ^ to return it. It was held that he was 
entitled to do so. " The effect of the contract," said Cleasby, 
B., " was to vest the property in the buyer subject to a 
right of rescission in a particular event, when it would re* 
vest in the seller. I think in such a case that the person 
who is eventually entitled to the property in the chattel 
ought to bear any loss arising from any depreciation in its 
value caused by an accident for which nobody is in fault. 
Here X is the person in whom the property revested, and 
he must therefore bear the loss." 

(2) Ocenrrence of a specified event. — The parties may 
introduce into the terms of their contract a provision that 
the fulfillment of a condition or the ocenrrence of an event 

«. L. R 7 Sxcb. 7. 

1 Head v. TattersalL— Hunt ▼. Wjman, 100 Mass. 108; Dearborn t. 
Tomer, 16 Me. 17; Boewell y. Bicknell, 17 Me. 844: Martin t. Adams, 
104 Mass. 262; McKinney y. Bradlee, 117 Maas. 821; KimbaU ▼. Vro- 
man, 85 Mich. 827. If the chattel sostains injury through the bayer*! 
Italt, the right of return is lost and the eeUer maj bring attuwyei/ for 
the price. Bay t. Thompeon, 19 j^^^^ ^x. 



us DI8CHABOB OF OONTRiLCr. PiitY 

shall difloharge them both from further liabilitieB under the 
contract 

CondUion qf Bond. — Such a provision is called a condi- 
Han &uhseqti0ntj and is well illustrated bj the case of a Bond, 
which is a promise sabject to, or defeasible apon a condition 
expressed in the Bond. 

EaooepUd risks qf {Aarter-party. — Such a provision may 
be further illustrated bj the ^^ excepted risks" of a charte^ 
party. In a contract of that nature the ship-owner agrees 
with the charterer to make the voyage on the terms ex- 
pressed in the contract, " the act of Ood, Queen's enemies, 
restraints of princes and rulers, fire, and all and every other 
dangers and accidents of the seas, rivers, and navigation, of 
whatsoever nature or kind, during the said voyage, dlwoj/s 
excepted.^ The occurrence of such an excepted risk releases 
the ship-owner from the strict performance of the contract; 
and if it should take place while the contract is whoUy ex- 
ecutory, and amount to a frustration of the entire enter 
prise, the parties are altogether discharged. 

In Oeipsl V. Smithy^ the plaintiff had chartered the de- 
fendant's vessel to go to a spout, load a cargo of coals, and 
proceed thence to Hamburg: the contract contained the 
usual excepted risks. Before anything was done under the 
contract a war broke out between France and Germany, 
and the port of Hamburg was blockaded by the 
[*266] French fleet. The ^defendant thereupon, regarding 
a blockade as a '^ restraint of princes," refused even 
to load a cargo, and treated the contract aa being at an 
end. The plaintiff sued him for not having fulfilled so 
much of the contract as would not have involved the risk: 
but the Court held that as a performance of the main oIk 
ject of the contract had become impossible by the occmv 
rence of an excepted risk, the defendant was not bound to 
attempt a fulfillment of his preliminary duties. 

Limitations qf earrier^s liability. — Another illustration 
may be drawn ^m the oontraot entered into by a common 



Chap. LIS. BY AGREEMENT. Mi 

carrier. A oommon oarrier is said to warrant or insure the 
safe delivery of goods entrusted to him ; and bj this we 
mean that he makes an almost unqualified promise to bring 
the goods safely to their destination or to indemnify the 
owner for their loss or injury. His promise is, however, 
not wholly unqualified; it is defeasible upon the ocourrenoe 
of certain excepted risks, — '* The Act of Ood and of the 
Queen's enemies," and injuries arising from defects inherent 
in the thing carried.' This qualification is an implied term 
in every contract made with a carrier, and the occurrence 
of the risks exonerates him from liability for loss incurred 
through their agency. 

The Act of God is a phrase which needs some explana- 
tion, but which has not until very recently received any 
judicial exposition. 

Meaning of phrase ^Act of Ood.^^^ The case of iTu- 
ffent V. Smithy however, affords a good definition of its 
meaning, so far as its meaning is susceptible of definition. 
In that case the defendant, a common carrier by sea, re- 
ceived from the plaintiff a mare to be carried from London 
to Aberdeen. In the course of the voyage the ship met 
with rough weather, and the mare, being much frightened 
and struggling violently, suffered injuries of which she 
died. No negligence was proved against the defendant, but 
the Court of Oommon Pleas* held him to be liable on the 
ground that the rough weather was not so violent and un- 
usual as to amount to ^^ the Act of Ood/' nor was 
the struggling of the *mare alone enough to show [*267] 
that it was from her inherent vice that she was in- 
jured. But the Court of Appeal reversed this decision, and 
endeavoured to frame an intelligible definition of such an 
** irresistible cause of loss " as is described by the term ^' Act 
of God.'* 

The difference between the two decisions comes to this: — 
The Court of Common Pleas held that to constitnta the 

«. Ni««ilT.8aiith,iaF.D.«nL 

k iap.D.iiL 



C:0 DISCHARGE OF CONTRACT. Part V. 

^ Act of God,'* a loss must arise from '^ sach a direct and 
violent and sudden and irresistible' act of nature " ' as could 
not be foreseen, or, if foreseen, prevented; the Court of Ap- 
peal held ^' that it is not necessary to prove that it was ab- 
solutely impossible for the carrier to prevent it,* but that 
it is su£Scient to prove that by no reasonable precatUion under 
the circumstances could it have been prevented^ ^ 

This exception from the general liability of the carrier of 
goods is a known and understood term in every contract 
which he makes. The discharge hence arising must be dis- 
tinguished from discharge arising from a subsequent impos- 
sibilit}' of performance not expressly provided against in the 
terms of the contract With this we shall deal hereafter. 

(3) Discharge optional with notice.— Thirdly, a con- 
tinuing contract may contain a provision making it determi- 

a. Per Brett, J., p. SI 

6. Per Melliah. L. J., P 441. 

> Smith T. Na-reiit— In The Propeller Niagara ▼. CordeB, 21 How. T, 
it was beld that after a vi^ssel is stranded, there is still an obligation to 
take all [lossible care of the cargo, and proof merely of reasonable care 
and diligence will not excuse him from liability; that he is respontdble 
for any Ices or injury which '* human exertion, skill and prudence" 
might have prevented. Thin rule has been conKiderably modified by S 
later decision of the same court. In Raih*ond Co. v. Reeves, 10 Wall 
176, Miller, J., said "when carriers discover themselves in peril by in- 
evitable accident, the law requires of them ordinary oare, skill and fore- 
sight/* Morriiion v. Davis & Co. 20 Pa. St 171; NashviUe IL R v. 
David, 6 Heisk. 261. 

Act of God.— Many attempts have been made to define this term. It 
is more easily understood and illustratetl than defined. *'By the actuf 
Qod is meant, any accident produced by physical causes; such as light- 
ning, MtoruiH. perils of the sea, earthquakes, inundations, sudden death, 
or illness. The act i)f Qcxi exuludes all iilea of human agency.** Fifik 
▼. Chai man, 2 Oa. 840; 46 Am. Dec. S09; McArthur v. Sears, 21 Wend. 
190. The use of the terms ** inevitable accident '* and " act of God ** as 
■ynonymous leads to confusion, for accidents arising from human 
agency are sometimes inevitable. Many courts, however, insist that 
there is no distinction in the terms. Neal v. Saunderson. 8 S. & M. 
(Miss.) 672 ; Walpole v. Bridges, 6 Blackt 222 ; Crosby ▼. Fitch, 19 Conn. 
410. 



Chap. L 8 8. BY AOREEMENT. 851 

nable at the option of one of the parties upon certain terms. 
Such a provision exists in the ordinary contract of domestic 
service,^ the servant can terminate the contract by a month's 
notice, the master by a month's notice or the payment of a 
month's wages.^ And similar terms may be incorporated 
with other contracts between employer and employed, either 
expressly or by the usage of a trade. 

A was engaged by X to serve him for a year as agent in 
his business of a woollen merchant/ but was dismissed in 
the course of the year at a month's notice. He sued X for 
breach of contract It was proved to be a custom of the 
trade that all such engagements were determinable at a 
month's notice. The jury found that the custom existed, but 
they further found that it did not form a part of the 
contract.' *The Court, however, decided that, having [♦268] 
been found to exist, the custom must be taken to 
form a part of the con tract, and that it was not for the jnry 
to construe the contract so as to exclude it. X was there- 
fore held to be entitled to determine the contract in virtue 
of this implied term, although the engagement was to have 
lasted for a year had he not exercised the option given to 
him by th0 custom. 



«. iro«rlABT.Ab]ett,saM. AaSl 
k FMkar T. n>betflon, 4 a a N. a 8«r. 



iThe iHreBumptions of fact, recognized in the EInglish ooorta, regard- 
ing the term of serrioe in contracts between master and servant and the 
right to determine such service on a month's notice, do not prevail in 
this country. MiUer ▼. Qoddard, 84 Me. 102; Wood on Master and Serv- 
ant, aeca. 2, 116; The Saxonia M. & R. Ca v. Cook, 7 CoL 572; 1 Ck>olej'f 
Blackalone, 425, note. 

1 In Parker v. Ibbetson the hiring was at a yearly salary, and the court 
held that, "generaUy speaking, a yearly salary imports a yearly hiring,* 
and that the custom to determine such engagement on a month's notice 
was not at variance with the words of the contract, which contained do 
express agreement regarding the term of service. But where the en- 
gagement is for a term certain, evidence of such a custom should be ex- 
cluded. A local usage cannot be considered a part of a contract when 
it oontradicts that contract. Sweet v. Jenkins, 1 R^ L 147 ; Barlow ▼• 
LambsK^ S8 Ala. 704: Imwwobl on Usages and Custom^ sea SlOl 



868 UlSCHABO£ OF OONTRACT. Pftrt \ 

Form of discbarge by agreement. — It remains to con 
iider the form in which it is necessary to express an agree- 
ment purporting to discharge a contract already existing. 

The general mle is, that a contract must be discharged in 
the same form as that in which it is mada A contract 
under seal can only be discharged by agreement, if that 
agreement is also under seal^ a contract entered into by 
parol may be discharged by parol. 

1 Contracts under MaL— The general doctrine that a contract under 
teal cannot he discharged hj a parol agreement is recognised in this 
country; hut it ie mibject to qualification. 

1. Executory eontracU, — An executory contract under teal cannot 
be modified or rescinded by an executory parol contract AUen t. Jao 
quish, 21 Wend. 688; Sherwin t. Rut ft Bur. R. R. Co. 84 Vt 847; Del- 
acroix ▼. Bulkley, 18 Wend. 71; French t. New, 28 N. Y. 100; Loach t. 
Famum, 90 Dl. 868; Chapman t. McQrew, 80 HI. 100; Smith ▼. Lewis, 
84 Conn. 641. 

8. Executed contracte.— Where the subsequent parol contract has 
been acted upon the rule is different While evidence of a subeequent 
parol agreement that has not been carried into effect, cannot be received 
to vary or discharge a sealed instrument, still, when the parties have al- 
tered their situation by acting on the new agreement, the evidence is 
proper. Under the English rule a parol agreement to vary a oontrad 
under seal is not valid, even when it has been acted upon by the parties, 
and cannot be recalled without injustice. Such is not the prevailing rule 
in this country. Allen v. Jacquish, 81 Wend. 688 ; Jewett v. Schoeppel, 
4 Cow. 664; Dearborn v. Cross, 7 Cow. 48; Monroe v. Perkins, I!ick. 
808; Green v. Wells, 8 Cal. 584; Le Fever v. Le Fever, 4 Serg. ft B. 841; 
Cook V. Murphy, 70 111. 06; Whiting v. Heslep, 4 CaL 827; Lawrence t. 
Dole» 11 Vt 655; Cabe v. Jameson, 10 Lred. 108. Li Canal Co. v. Bay, 
101 U. S. 522, Strong, J., said: ''Notwithstanding what was said in 
some of the old cases, it is now recogniaed doctrine that the terms of 
a contract under seal may be varied by a subsequent parol agreement. 
Certainly, whatever may have been the rule at law, such is the rule in 
equity." To the same effect, Bobinson v. Bullock, 66 Ala. 554; Mill 
I^m Foundry v. Henry, 21 Pick. 420. See Lawrence v. Miller, 86 N. 
Y. 181 ; Jenks v. Bobertson, 58 N. Y. 621 ; Hyderville Co. v. Eagle B R. 
ft Slate Co. 44 Vt 895; but as we have said, the parol contract mnst be 
executed or it will not operate as a discharge or rescission of the specialty. 
Unthank v. Henry County Tump. Co. 6 Ind. 126; McMurphy v. Qarland, 
47 N. H. 822, 823; Buell v. Miller, 4 N. H. 196. Many of the cases cited 
are authority for the proposition that a contract under seal cannot be 
discharged before breach by a parol contract, y ^t may after breach. See 
McMurphy v. Garland, 47 N. H '^ 



I» S S. BY AGREEMENT. 838 

(1) Incase of contract nnder seal, discharge mnstbo 
under seal. — Parties to a deed cannot therefore discharge 
their obligations by a parol contract; but it is possible for 
them to make a parol contract which creates obligations 
separate from, and yet substantially at variance with the 
deed. 

If Majid X enter into a contract under seal, they cannot 
meet and by word of mouth or by writing waive their re- 
spective rights under the contract But they may make 
such a contract as does in effect contravonid the terms of the 
deed, and gives b right of action to which the deed furnishes 
no answer. Jf and X entered into a contract under seal^ 
by which Mlet to X certain rooms for a certain time at a 
rent to be ascertained in a certain way.' M died, and A his 
administrator agreed with X by parol, that in consideration 
of £70 to be paid by X and to be taken as a reasonable rent^ 
neither party should be called upon to perform his part under 
the deed. X failed to make the payment agreed upon, and 
A sued him upon the parol contract It was urged on be- 
half of X that the parol contract was an attempt to vary the 
deed by an instrument not under seal; and that a perform- 
ance of this contract, being no discharge of the deed, 
would *leave him liable to his previous obligation. [*269] 
But the Court held that the parol contract created 
a new obligation, and was not an attempt to vary an old 
one; that a performance of this new contract would fur- 
nish a good equitable answer to an action brought upon the 
contract under seal; and that therefore A was entitled to 
bring action upon the parol contract 

(2) In case of parol contracts. — A parol or simple con- 
tract may be discharged by writing or by word of mouth, 
whether or no the original contract be in writing; and this 
follows from what has been said before, that the writing is 
not the agreement but the evidence of it, and that, as the 
essentials of agreement lie in the expressed intention of the 
parties and not in the writing which is the instrument of 

i ▼. inumns, tt a & H. a aa 
ss 



154 DISCHABQE OF OONTRACI. Ptet T 

that expression, the contract may be discharged ^ eo Tig^k^ 
mine quo ligatum m^/' by a valid expression of the inten- 
tion to pat an end to it} 

But an exception must be made where a contract is re- 
quired by Statute* to be in writing. In such a case there 
appears to be authority for saying that an absolute dis- 
charge of the contract may take place by word of mouth. 
But if the discharge be not a simple rescission or cancella- 
tion, if it be such an implied discharge as arises from the 
making of a new agreement inconsistent with the old one, 
then there must be writing such as would satisfy the enact-, 
ment which governs the original contracL* 

The most recent authority upon this point is the ease of 
Noble * V. Ward} There a contract was made for the sale of 

•. Under 99 Car. Has. 1 4. 

h. GomAB ▼. Salfabuiy, 1 Van. MOL 

CL L. R. S Bzch. ISX 

1 Seaman ▼. 0*Hara, 89 Mich. 66 ; Brown t. Ererhard, 63 Wis. 906 ; Aid- 
rich T. Price, 67 la. 161 ; McNichols t. Reynolds, 06 Pft. Bk 488; Swain 
T. Seamena, 9 Wall 264; Thuraton t. Ludwig, 6 Ohio St. 1; Wiggin t. 
Goodwin, 68 Me. 889; Flanden t. Faj, 40 Vk 816; Bryan ▼. Hiuil» 4 
Band. 648. 

s Noble T. Ward.— In the early case of Cuff ▼. Pttin, 1 M. ft a 21 
(1818), it was decided that a contract in writing and within the statute 
of frauds might be varied by a subsequent Terbal contract, extending 
the time of performanot^ This case has been OTemiled, and the modem 
Kngliah doctrine is in accordance with Noble t. Ward. In this ooontry 
the case of Cuff t. Penn has been followed by some courts, and to the 
extent of holding that a contract within the statute may be modified 
by a subsequent oral agreement for a substituted performance. Cum- 
mings ▼. Arnold, 8 Met. 486; Whittier t. Dana, 10 AIJ^, 826; Richard- 
son ▼. Cooper, 26 Me. 460; Negley t. Jeffers, 28 Ohio k: 90. In Blanch- 
ard T. Trim, 88 N. Y. 227, Hunt, C J., said, " The statute requires the 
making of the contract to be in writing, but it does not undertake lo 
regulate its performance, nor does it say that it shall not be varied by 
paroL That is left to be decided by the general rules of law and en- 
dence.** These cases are not, however, in accord with the weight of 
authority in this country. In Swain t. Seamens, 9 Wall. 272, Clifford, 
J., said: ** The better opinion is, that a written contract falling within 
the statute of frauds cannot be Taried by any subsequent agreement of 
the parties, unless such new agreement is also in writing." MuasaliBtf 



aiaii.L8i. BY AGREEMENT. tU 

goods upon the 18th of August, in which it was agreed 
that the goods should be delivered within a certain timei 
This contract was in writing and satisfied the requirementa 
of 29 Gar. IL c. 3, § 17. On the 27th of September a ver 
bal agreement was made extending the time for delivery. 
An action was brought by the vendors for non-acceptance 
of the goods, and '* the defendants contended that the effect 
of the contract to extend the time for delivery was to re- 
scind the contract of the 18th of August." But 
the agreement *of the 27th of September, being [*270] 
made by word of mouth, was invalid, and could '' be 
allowed to be good " as a new contract for the sale of the 
goods. The defendants nevertheless contended that though 
invalid to create a new contract, it was valid to rescind the 
existing one. But this contention the Court would not 
allow; it was, in fact, laid down ''that no rescission could 
take place by an invalid contract." And the same rule* has 
been applied to contracts under the 4th, and contracts un- 
der the 17th sections of the Statute of Frauds. 

m>. Qom ▼. Lord Nugent* 6 B. A Ad 66w 

V. Stoner, 81 Pa. St. 265 : Dana t. Hancock, 80 Vt. 616 ; Blood ▼. Goodrich, 
• Wend. 68; Schultz ▼. Bradley, 67 N. T. 646; Carpenter ▼. Galloway, 
TSInd. 418; Hasbrouck ▼. Tappen, 16 Johna. 204; Abell ▼. Munaon, 18 
Mich. 812; Packer ▼. Steward, 84 Vt. 138; Organ y. Stewart, 60 I^. T. 
418, 419; HUl ▼. Blake, 07 N. T. 216. But a substituted performance 
agreed upon by parol, actually and fully executed by the vendor and 
accepted by the yendee, may be set up in defense at law in a suit on a 
written ccMitnct within the staCute of frauda. Long y. HartweU, 84 
H. J. U lie 



CHAPTER n. 
DlMharge of Contiaot by Ferformanoei 

Thu branoh of oar snbjeot need not detain ns long, but 
there are some aspects of performance which call for a brief 
notice. 

Kinds of performance. — We most distinguish perform- 
ance which discharges one of two parties from farther lia- 
bilities ander a contract, and performance which amoants to 
an extinction of the obligation. 

Where promise Is glyen for execnted consideration. — 
Where a promise is given upon an execnted consideration, 
the performance of his promise by the promisor discharges 
the contract: all has been done on both sides that conld be 
reqaired to be done ander the contract. 

IVhere promise is given for promise. — Where one 
promise is given in consideration of another, performance by 
one party does not necessarily discharge the contract, 
though it discharges him who has performed his part from 
doing more. Each must have done his part in order that 
performance may be a solutio obligatianisj and so if one has 
done his part and not the other, it is still possible that the 
contract may be discharged in any one of the ways we have 
mentionidd. 

Whether or no a contract has been performed is a matter 
which, so far as the person performing the contract is 
concerned, must be answered by reference to the operation 
^contract; so far as the performance is concerned, must be 
answered by reference to the construction of contracL If 
there be a failure of performance, partial or total, then the 
eontract is broken; whether the breach amoants to a dis- 
I is a question to be discussed hereafter. 



Chap. n. BY PEBFOBMANG& m 

*Bat there are two aspeots of Performanoe whioh [*27S] 
we maj Bhortly dwell apon : these are^ Payment and 
Tender. 

Patmxht. 

Payment as a mode of discharge. — In dealing with pay* 
ment as a form of disctiarge we must place it nnder the 
head of performanoe, although payment is intimately con- 
nected with the discharge of contract and of the rights aris- 
ing from breach of contracti by means of a substituted agree- 
ment. 

Of original contract. — If in a contract between A and 
J[ the liability of X consists in the payment of a sum of 
money in a certain way or at a certain time, such a pay- 
ment discharges X by the performance of his agreement. 

Of substituted contract. — If, again, X being liable to 
perform various acts under his contract, wishes instead to 
pay a sum of money, or, having to pay a sum of money, 
wishes to pay it in a manner at variance with the terms of 
the contract, he must agree with A to accept the proposed 
payment in lieu of that to which he may have been entitled 
under the original contract. Payment is then a perform- 
ance of X's duties under the new agreement, and, so far as 
he is concerned, a consequent discharge. 

Of liability arising from breach of contract. — Again, 
where one of the parties has made default in the perform- 
ance of his part of the contract, so that a right of action ac- 
crues to the other, the obligation formed by this right of 
action may be discharged by acoord and Botiaf action^ an 
agreement the consideration for which is usually a money 
payment, mad e by the party against whom the right exists, 
and accepted in discbarge of his right by the other. * 

Payment is performance. — Payment, then, is the per- 
formance of a contract, whether it be a performance of an 
original, or of a substituted contract, or of a contract in 
which payment is the consideration for a forbearance to 



108 DIflOHABGB OF CX>NTBACZ. FuiV. 

ezerase a right of action which may hare arisen from the 
breach of an agreement. 

It remains to notice some points which arise when 
[*273] a ^negotiable instrument is given in payment of a 
sum due, whether as the performance of a contract 
or in satisfaction for the breach of it 

Negotiable instrument as payment. — The giving of such 
an instrument in payment of a liquidated or unliquidated 
claim is in effect a substitution of a new agreement for the 
old one, but it may affect the relations of the parties in 
either one of two different ways. 

If X makes a payment to A either in performance of an 
existing contract, or in satisfaction of a broken contract, and 
that payment takes the form of a negotiable instrument^ 
X may be discharged from his previous obligation either 
absolutely or conditionally. 

Hay be an absolute or conditional discharge. — A may 
take the bill or note, and promise, in consideration of it^ 
expressly or impliedly to discharge X altogether from his 
existing liabilities.^ A then relies upon his rights con- 
ferred by the instrument, and if it be dishonoured,' must 

m. Btad^. «l>odM, 1 M. A W. 15& 

iParment of precedent debt — The English rule is foUowed in the 
federal courts, and under the decisions of the state courts generally a 
promissory note of the debtor or a stranger does not discharge the 
precedent debt for which it is given, unless such be the express agree* 
RMnt of the parties. The note only operates to extend the period for 
Ihe nayment of the debt The KimbaU, 8 Wall. 87 ; Emerine t. O'Brien, 
16 Ohio St 491; Walsh t. Lennon, 98 IlL 27; Casey. Sears, 44 Mich] 
195; Brown ▼. Olmstead, 50 Cal. 162; VaU t. Foster, 4 N. Y. 812; Feld- 
nan t. Bier, 78 N. Y. 293; McGuire y. Bid well, 64 Tex. 48; Akin y. 
Peters, 45 Ark, 818; Lochenmeyer y. Fogarty, 112 Dl. 578; Racine Bank 
y. Case, 68 Wis. 504. Numerous authorities on this proposition are col- 
lected in 2 BenJ. on Sales, 4th Am. ed. 1081, n. 17; and note of Prof. 
Rogers in 21 Am. Law Reg. 518. In some of the American states the 
English rule is departed from, and a note goyerned by the law mei^ 
chant, receiyed upon an indebtedness, is regarded as absolute payment^ 
onlesB a contrary intention is made to appear. Such is the rule in 
ICaine, Massachusetts, Indiana and Vermont Paine y. Dwinell, 58 Ma 



€Sbm^ n. BT PERFORMANCE. tSt 

Boe on it, and cannot revert to the original canse of action. 
But the presumption, where a negotiable instrument is taken 
in lieu of a money payment, is, that the parties intended it 
to be a conditional discharge. Their position then is this: 
A. having certain rights against Xy has agreed to take a 
negotiable instrument instead of immediate payment,* or 
immediate enforcement of his right of action, and JC has so 
far satisfied J.'s claim. But if the bill be dishonoured at 
maturity, the consideration for A^s promise has wholly 
failed and his original rights are restored to him. The 
agreement is ^^ defeasible upon condition subsequent;" the 
payment by X which is the consideration for the promise 
by A is not absolute, but may turn out to be, in fact, no pay- 
ment at all. 

Payment then consists in the performance either of an 
original or substituted contract by the delivery of money, 
or of negotiable instruments conferring the right to receive 
money ; and in this last event the payee may have taken 
the instrument in discharge of his right absolutely, or snb* 

a, 8«yer ▼. Wagstaff, 5 Beav. 4SS. 

63; Dodge ▼. Emerson, 181 Mass. 467; Smith y. Bettger, 68 Ind. 264 1 
Hutchins ▼. Olcutt, 4 Vt. 649; Wait v. Brewster, 81 Vt. 616. See Boeder 
T. Nay, 95 Ind. 164. 

Payment of eontemporaneons debt. — Courts generally diBtinguiah 
between those cases where a note is given for a precedent debt, and 
those where a note is given for a contemporaneous debt. When the 
note of a third person is given for a debt contracted at the time, the infer- 
ence is that such note was received in payment of the indebtedness; but 
no such inference arises where the note of the debtor or of a third per- 
son is given for a precedent debt, or where the note of the de&tor is given 
for a contemporaneous consideration. Wilson v. Force, 6 Johns. 110; 
Whitbeckv. Van Ness, 11 Johns. 409; Noel v. Murray, 18 N. Y. 167; 
Mclntyre v. Kennedy, 29 Pa. St. 448; Bayard v. Shink, 1 W. & S. 96; 
Devlin t. Chamblin, 6 Minn. 827; Booth v. Smith, 8 Wend. 66; Ford v. 
Mitchell, 16 Wis. 808. If, however, the debtor indorses the note or bill 
of a third party, given for an indebtedness created at the time, such in- 
dorsement is evidence that the creditor does not take the note at his own 
risk ; aad it wiU be regarded only as conditional payment. Whitney t. 
Ooin, 20 N. £L 864; Shriver v. KeUer. 27 Pa. St 61; 2DmiL Neg. Inst. 
1266. See Soffe v. Gallagher, 8 E. D. Smith, 61C 



160 DISCHABOE OF OONTBACX Ftet ▼. 

ject to a condition (which will be prasnmed in the absence 
of expressions to the contrary) that if payment be 
[*274] not made *when the instrument falls due, the par- 
ties revert to their original rights, whether those 
rights are, so far as the payee is concerned, rights to the 
performance of a contract or rights to satisfaction for the 
breach of one/ 

We have dwelt thus upon Payment because it is often so 
faivolved with the subject of substituted agreement as to 
cause some obscurity/ 

TSNDKB. 

Tender by delivery. — We now come to an attempted 
Performance, or Tender. The word is applied to perform- 
ance of two kinds, and to attempts to perform which are 
not similar in their results. It is applied to a performance 
of a promise to do something, and to a performance of a 
promise to pay something. In each case the performance 
is frustrated by the act of the party for whom the perform- 
ance is to take place. Where in a contract for the sale of 
goods the vendor satisfies all the requirements of the con- 
tract as to delivery, and the purchaser nevertheless refuses 
to accept the goods, the vendor is discharged by such a 
tender of performance,* and may either maintain or defend 
successfully an action for the breach of the contract.^ 

Tender of payment.— But where the performance due 
consists in the payment of a sum of money, a tender by the 
debtor, although it may form a good defense to an action 
by the creditor, does not constitute a discharge of the 
debt* 

If the creditor will not take the money due to him when 
he has a right to demand it, he puts himself at a certain 

m. 8m Judgment of Parke, B., Boblnwm t. Seed, 9 B. A 0. tfB. 
Ik. Sayer ▼. Wacstaff, 6 BeaT. 4StL 

CL Startup T.Maodonald, IL A O. 608; Beigamln oa Salei, p. 661 
tf. DlzoD T. Clark, 6 a B. S76. 

^Bacrj T. NaU, 64 Ala. 446; Simmons t. Green, 86 Ohio St 104; 
Phelps ▼. Hubbard, 61 Vt 480; Qerelaod t. Sterrett* 70 Fla. 8t 801 



Ghaik n. BT PERFOBMANGB. 861 

disadvantage in trying to recover it by action; but the 
debtor most, in order to defend himself snccessfolly by a 
plea of tender, continue always ready and willing to pay 
the debt Then when he is saed upon it, he can plead that 
he tendered, bat he must also pay the money into Court. 

If he proves his plea, the plaintiff gets nothing but the 
money which was originally tendered to him, the 
defendant *gets judgment for his costs of defence, [*275] 
and so is placed in as good a position as he held at 
the time of the tender. 

Tender, to be a valid performance to this extent, must 
observe exactly any special terms which the contract may 
contain as to time, place, and mode of payment Besides 
these requirements the tender must be an offer of money 
produced and accessible to the creditor, not necessarily of 
the exact sum, but of such a sum as that the creditor can 
take exactly what is due without being called upon to give 
change.^ 

1 A tender of payment must be unconditional and not a mere offer of 
oompromise ; must be made in good faith by the debtor or by some pel^ 
•on duly authorized, and to the creditor or a person authorized to r^ 
oeive payment; must be made within reasonable hours, and to stop the 
running of interest and costs must be kept good. Elderkin ▼. Fellows, 
eo Wis. 839; Aulger t. Clay» 109 UL 487; Mathews ▼. Lindsay, 20 Fla. 
96; Stafford ▼. Welsch, 69 N. H. 46; Waidron v. Murphy, 40 Mich. 668; 
Sinclair t. Leamerd, 61 Mich. 889; Carman ▼. Pulte, 21 N. Y. 647; Potts 
T. Plaisted, 80 Mich. 149. As a general rule the party should not only 
have the money about him, but should produce it, unless its production 
is waired by the creditor ; and it is said that a declaration on the part of 
the creditor that he wiU not or can not receive it amounts to such 
waiTer. Hazard t. Loring, 10 Cush. 267 ; Finney t. Jorgenson, 27 Minn. 
26; Quthman t. E[eam, 8 Neb. 602; Berthold t. Reyburn, 61 Ma 686; 
Parker ▼. Pettit, 43 N. J. L. 612; Oakland Savings Bank ▼. Applegarth, 
67 Osl. 86; Mathis t. Thomas, 101 Ind. 119. The decisions are numerous 
and not entirely harmonious upon the requisites of tender. In moet 
states the legislatures haye determined what obligations may be effected 
by tender, and have provided regarding its formal requisites. Under 
the constitution of the United States no state can make anything but 
gold and ailver coin a tender in payment of debts. Art. 1, sea Id. 



set ' DISCHABOR OF (X>NTBACn. Piit V. 

Le^al tender, as regards ooinage and notei, is regulated 
by various statates.* 



«. taiid4 wm. IT.ai «. |«»«MliaMlBi^af 
Mj mam Abov« S&. 99 and SO Tlok e. 0B, ^hm power to tho Quew to proolalm 
fold ooiMgw of ooIobIaI mlnti ihould be togoltendor lbroig«iMNit 007 poet oCIm 
■ilnloiioipeallladlBtboprooUinattoB. M oad 84 VIot oi M. Moeti tiurt tte 
Sm mtBt ahoU bo loROl tender oo foUows: —gold ooIbi» to oqj 
lote^^dni^ii bf ooni ooIm. op to one Afllli^ 



CHAPTER in. 

Dlsehaxge of Contract by Breach. 

Breach always gives right of action, not always a dls- 
narge. — If one of two parties to a contract breaks through 
he obligation which the contract imposes, a new obligation 
will in every case arise, a right of action conferred upon 
the party injured by the breach. Besides this, there are' 
circumstances under which the breach will dischcMrge the 
injured party from such performance as may still be due 
from hiuL We must, however, bear in mind that, though 
every breach of the contractual obligation confers a right 
of action upon the injured party, every breach does not 
necessarily discharge him from doing what he has under- 
taken to do under the contract. The contract may be 
broken wholly or in part; and if in part, the breach may or 
may not be sufficiently important to operate as a discharge; 
or, if it be so, the injured party may choose not to regard 
it as a breach, but may continue to carry out the contract, 
reserving to himself the right to bring action for such dam- 
ages as he may have sustained by the breach. It is often 
very difficult to ascertain whether or no a breach of one of 
the terms of a contract discharges the party who suffers by 
the breach. 

By dischanrge we must understand, not merely the right 
to bring an action upon the contract because the.other party 
has not fulfilled its terms, but the right to consider oneself 
exonerated from any further performance under the con- 
tract, — the right to treat the legal relations arising from 
the contract as having come to an end, and given plaoe to 
a new obligation, a right of action. 

Discharge indicated by old forms of pleading. 
•The discharge of contract is indicated with some [•277] 



114 DISCHABGE OF OONTRACn. FtetT 

preoision by the pleadings in use before the Jadicatnre 
Acts. Many of the cases which illustrate this part of 
the subject turn upon questions of pleading, and we shall 
And that the understanding of the remedy, as often happens, 
ifl a material assistance to the ascertainment of the right. 
At the risk of a digression we will turn for a moment to 
this aspect of the question before us. 

S L Porition of parties wJiere a Cantrnct ia dUeharged 
hy Breach. 

Exoneration f^om performance. — In a contract between 
A and X, a breach by X might be considered to be a dis- 
charge of the contract if A^ in bringing action upon it, was 
not required to allege that he had performed or endeavoared 
to perform that which was still due from him under the con- 
tract; or if X could not successfully use such non-perform- 
ance by A either as a cause of action or a ground of defence. 

Bight to sne in indebitatus assumpsit. — Further, where 
X made default after A had done all or a part of that which 
he promised, the contract was discharged by such default if 
A could sue for the value of that which he had done in ii\r 
debitattis aaaumpsU^ that is, on a new and distinct contract 
arising upon the acceptance of money, goods, or services 
offered by the plaintiff and accepted by the defendant. 

This needs a short explanation. 

Nature of the indebitatus counts. — Before the Judica- 
ture Acts came into operation, where an action was brought 
upon a contract arising on consideration executed, that is a 
promise, acted or uttered, to pay for money, goods, or serv- 
ices offered and accepted, the plaintiff might state his case 
in certain short forms known as the indebUattu counts. 
These, which were an adaptation of the action of Assumpsit 
to the subject-matter of the action of J)d>t^ did no more than 
state a money claim existing for money due, goods supplied, 

or services rendered. 
[*278] When applicable to special contract. — *In ce^ 
tain cases these counts were applicable to a claim 



m. 8 1. BY BBEACH. 800 

arising ont of a special oontraot, that is a contract arising 
upon express promises made on either side, but they were so 
applicable only where the contract was diacharged hy breach. 
If A had performed all that he had promised in a contract 
made with X, and there remained only a money payment 
due from Xresulting in a present liability in which Xmade 
default by non-payment, A might sue X in the form of an 
inddntcUus count. This means that A might sue upon a 
new and distinct contract, arising upon the offer and accept- 
anoe of that which he had performed. The performance of 
the original contract was so far complete that nothing re- 
mained to be done but a payment to be made by X to A: 
the payment was presently due; default discharged the con- 
tract, and A might sue, not only on the special contract as 
having been made and broken, but upon a contract arising 
from conduct, from the offer of an act, its acceptance, and 
a consequent implied promise to pay its worth, such as we 
''^scribed in speaking of executed consideration.* 

' The principle as to the proper form of declaring where 
the original contract has been executory, but the period of 
credit has expired, or condition has been performed, is, not 
that the law alters the mode of declaring on the original 
contract and states it not according to the fact, but that it 
conclusively infers that simple cotUrad to pay the price /or 
goods sold and delivered which would arise upon the/acts of 
a sale and delivery without any special circumstances accom 
ponying them. He who seeks to disturb that inference must 
not content himself with merely showing conditions, or othei 
special provisions forming part of the contract at the time 
of its being entered into : he must show them in existence and 
operation at the tim>e of action brought: if not, they must be 
struck out of consideration and the contract treated as 
originally simple, unconditional, and executed." * 

A quantum meruit. — A similar practice prevailed 
where, A having done a *part, though not ail that he [*279] 

ii Fw Car., Btvwimf ▼. LiMoiB qm xiffU a 08k» Ott. • ▲. a & or. 



M6 DISCHABOE OF OONTBACr. FtotY 

was bound to do under the contract, X committed a breacli 
which amounted to a discharge. If that which A had 
done could be represented in a claim for money payment, 
A was entitled to sue, not only on the special contract, bat 
in indebitatm oMtimpait^ for a quantum meruit or the 7alae 
of so much as he had done. 

'* If a man agrees to deliver me one hundred quarters of 
com, and after I have received ten quarters, I decline taking 
any m&re^ he is at all events entitled to recover agamst me 
the value of the ten that I have received.''* 

When it may be sued upon. — But the right to sue in 
this form on a quantum meruit is frequently and emphat- 
ically stated to depend on the fact that the contract has 
been discharged. On the other hand, it is laid down* ^*as 
an invariably true proposition, that wherever one of the pa^ 
ties to a special contract not under seal has in an unquali- 
fied manner refused to perform his side of the contract, or 
has disabled himself from performing it by his own act, the 
other party has thereupon a right to elect to rescind it, and 
may, on doing so, immefliately sue on a q^iantum meruit^ for 
anything which he had done under it previously to the re- 
scission." * 

It is possible that A may have done nothing under the 
contract which can be estimated at a money value, or that 
the default made by X is not such as can be stated in the 
form of a money claim. Then if the breach amount to a 
discharge, A is exonerated from such performance as may 
still be due from him, and is entitled to sue at once upon 
the special contract for such damages as he has sustained. 

%. P«r BMt. 0. Jm ItonirT. PyiM. I Bins. 88. 

k Hull* ▼. HaiKhtnutt, S Em(, 145; a 8mlUi*t L. O tL 

1 Holle T. Helifhtmaii is a leading case in this ooontrj and of ob* 
questioned authority. Dermott ▼. Jones, 3 WalL 1; Chesapeake A 
Ohio Canal Co. v. Knapp, 2 Peters, 641 ; WiUing y. Sherman, 7 Wend. 
109; Baker ▼. Corey, 19 Pick. 496; McKee t. Vincent, 88 Minn. 606; 
MoGhraw t. Stoigeon, 29 Mich. 425; 2 Smith, U a, Hare ft Wallace'^ 
49. 



CLh^ m. fil BY BR£ACH. M7 

The new nilt9& of pleading lately issoed nnder the Jadioa- 
tore Act* do not alter the relations of the parties, though 
the forms of pleading are shortened and a simple indorse- 
ment on the writ of summons may be substituted for the 
old indebitcUtis counts. 

Bights of party discharged. — Thos where a contract 
between A and X is discharged by the default of X, A 
may — 

*{a) Consider himself exonerated from any fur- [*280] 
ther performance which may have been due on his 
part; and successfully defend an action brought for non- 
performance:* 

(fi) Sue at once upon the contract for such damages as 
he has sustained by its breach, without being obliged to 
show that such performance has been done or tendered by 
him:* 

(j) Lastly, if he has done all or a portion of that which 
he promised, so as to have a claim to a money payment for 
such performance, he may deal with such a claim as due 
upon a different contract arising upon a promise which is 
understood from the acceptance of an executed considerar 
tton.' 

§ 3. Form» of Diacharge h/ Breaeh. 

We are now in a position to ask, What are the oircnm- 
stances which confer the rights just mentioned! What is 
the nature of the breach which amounts to a discharge? 

A contract may be broken in any one of three ways: a 
party to a contract (1) may renounce his liabilities under it^ 
(2) may by his own act make it impossible that he should 
fulfill them, (3) may totally or partially fail to perform what 
he has promised. 

Of these forms of breach the first two may take place 
while the contract is still wholly executory, L e. before 

ck A. D. 1188. 0nl«r six, App. a 

ft. Bthn w. PiirneM. 1 B. A a 7M. 

c Ooci ▼. AjBterfsto BaUwaj Oa. 17Q. & Iff. 

4. PlMHsMT.OollNn,8BiiW.14. 



m8 DISCHABOB OF OONTBAGT. Ftet V. 

either party is entitled to demand a performance by the 
other of his promise. The last can, of course, only take 
place at or during the time for the performance of the oon< 
tract. 

We will therefore deal first with renunciation and impos- 
sibility created by the act of one party hefort performance 
is due, then with such renunciation and impossibility so 
created m tiie oaur^e of performance, and then with simple 
failure in performance. 

(1) Diaoharge ly r&nunoiatian iefars p&rformanoe is due. 

(1) Breach before performance is due. — The parties to 
a contract which is wholly executory have a right to some- 
thing more than a performance of the contract 
[*281] *when the time arrives. They have a right to the 
maintenance of the contractual relation up to that 
time, as well as to a performance of the contract when 
due. 

By renunciatton. — It is now settled that a renunciation 
of a contract by one of the parties before the time for per- 
formance has come, discharges the other, if he so choose, 
and entitles him at once to sue for a breach. 

Hoohaisr * v. DelcUour ^ is the leading case upon this sub. 

a, tE.ftB.07a 

1 Anticipatory breaeh.— Hochster t. Delatonr and Frost ▼. Knigfal 
have been followed in Crabtree ▼. Measersmith, 19 la. 182; Bungee ▼. 
Koop, 48 N. Y. 225; Howard ▼. Daly, 61 N. Y. 862; Ferris ▼. Spooner, 
102 N. Y. 10; James ▼. Adams, 16 W. Va. 267 ; Grist ▼. Armour, 84 Barb 
887; HoUoway t. QrifBth, 82 la. 409; Fox t. Kitton, 19 IlL 619; Cham- 
ber of Commerce t. Sollitt, 48 111. 519; Mountjoy ▼. Metsger, 12 Am. 
Law Reg. 442; Hancock t. New York Life Ins. Co. 18 Am. Law B^ 
108; McCormick ▼. Basal, 46 Ja. 285; Piatt ▼. Brand, 26 Mich. 175; Hos- 
mer y. Wilson, 7 Mich. 804. In England the law is regarded as settled 
in accordance with Hochster t. Delatour, Roper ▼. Johnson, L. R. 8 G. 
P. 178. The novel doctrine introduced by these cases has bem seriously 
questioned by respectable authority in this country. In Burtis ▼. 
Thompson, 42 N. Y. 246, 250, Qrorer, J., held that an action for breach of 
promise would lie at once, upon a positiTe refusal to perform a contraot 
of maniage^ although Uw time speoifled for the pecf ocmaaoa bad aol 



Ctm^ m. 8 1 BT BREACH. 868 

ject A engaged Xapon the 13th of April to enter into 
his service as courier and to accompany him upon a tour; 
the employment was to commence on the 1st of Jane, 1852. 
On the 11th of May A wrote to Xto inform him that he 
should not require his services. X at once brought an ao 
tion, although the time for performance had not arrived 
The Court held that he was entitled to do so. ^^ Where there 
is a contract to do an act on a future day, there is a rela- 
tion constituted between the parties in the meantime by 
the contract, and they impliedly promise that in the mean- 
time neither will do anything to the prejudice of the other 
inconsistent with that relation." 

It seems hardly necessary to have created an implied 

arrived, on the ground that the defendant had, by his renunciation, oo- 
caBioned plaintiff all the damage that a breach at the day would inflict; 
but in q>eaking of Hochster v. Delatour he said that he was " not foUy 
prepared to concur in the judgment of this case without further consid- 
eration.*' Its application, however, to actions for breaches of promise 
of marriage is generally recognized. See cases cited tupra. In Daniels 
T. Newton, 114 Mass. 080, the cases, Hochster ▼. Delatour, Frost v. 
Knight and other English cases are reviewed, and the doctrine of the 
text is disapproved of. Wells, J., in an able opinion gave strong reasons 
why the English cases should not be followed, and it was held by the 
oorurt that an action for the breach of a written agreement to purchase 
land, brought before the expiration of the time given for the purchase, 
oould not be maintained by proof of an absolute refusal on the defend- 
ant's part ever to purchase. In Dingley v. Oler, 11 Fed. Rep. 87S, La- 
veU, J., critidses the opinion of Wells, J., in Daniels v. Newton, and 
foUowB the English rule, which he states as foUows: " That doctrine is 
that in contracts for services, for marriage, for deliveries of merchan- 
dise, if the principal, before the time for performance arrives, renounces 
the contract, an immediate action will lie." The case of Dingley v. 
Oler came before the supreme court of the United States, see 117 U. S. 
SOS (188&f), and was reversed, but on the ground that no such renuncia- 
tion of the contract was shown as brought the case within the English 
authorities, and the court expressly declined to discuss or decide whether 
the doctrine of these authorities could be maintained. Mathews, J., 
caUed attention to the fact that they had been disputed in other courts 
and had never been applied in this. With regard to a renunciation it 
^lould be noted: 

A8C. That a mere expression of intention not to perform is not suffident 
to effect a breach of the contract There must be a distinct and unequivo 
U 



no DISGHABOE OF OONTBACT. DtfiT. 

oontraot in order to give the plaintifiF in this case a right of 
action. If X makes a binding promise to J., the obligation 
comes into existence at once, and consists in X's promise 
as well as in his performance of that promise. A is en- 
titled, not only to the promised act at the promised time, 
bat to the liability of X up to that time. In other words, 
the contract is a contract from the time it is made, and not 
from the time that performance of it is dae; and if this is 
so, it seems hardly in accordance with reason to introduce 
into every contract an implied promise that, up to a certain 
period of its existence, it shall not be broken. 

The sense of the rule is very clearly stated by Cockbum, 
0. J., in a case ^ which offers a somewhat further develop- 
ment of the rule in Ilochater v. Delatoar. In that case a 

time was fixed for performance, and before it ar 
[*282] rived the defendant ^renounced the contract. In 

Frost V. Knight performance was contingent upon 
an event wl^ich might not happen within the life-time of the 
parties. 

a. Wost T. Knlgfat, L. R. 7 Ezeh. 114, tai Exch. Cham. 

oal absolute refusal to perform the promise, which must be treated and 
acted upon as such by the party to whom the promise was maddi 
Smoot's Case, 10 Wall 86; Dingley t. Oler, 117 U. S. 608. 

2d. The renunciation may justify the other party in treating the am- 
tract as rescinded and excuse him from performance on his part or from 
offering performance before taking proceedings to enforce his rights; 
and may deprive the party disavowing his obligations under the con- 
tract, of the right to withdraw his declaration and continue the con- 
tract, after the other party had acted on such disavowal. Shaw v. 
Republic Life Ins. Co. 69 N. Y. 203; Daniels v. Newton. 114 Mass. 638; 
Cauda v. Wick, 100 N. Y. 127. 

8d. Where the contract establishes between the parties a present r^ 
lation of mutual obligations and the promisor renounces his llabilitj 
thereunder, under such circumstances as to effect something to th« 
prejudice of the promisee inconsistent with that relation, an action may 
be maintained at once though the time of performance has not arrived: 
but whether such renunciation will give an immediate right of setioo 
in all cases is an open question in this country. It could have no etfect 
on the right of parties to commercial paper, and it is believed that much 
must depend on the nature of the contract. Dingley v. Oler, 11 Fed. 
Bep. 872; Burtis v. Thompson, 42 N. Y. 260; 2 Para. Cont 671 



Cftap. m. § 8. BY BREACH. m 

A promised to marry X apon his father's death, and dtu^ 
Ing bis father's life-time renoanoed the contract; X was 
held entitled to sue upon the grounds explained above. 
" The promisee," * said Cockburn, 0. J., " has an inchoate 
right to the performance of the bargain, which becomes 
complete when the time for performance arrives. In the 
meanMme he has a right to ha/oe the contract kept open ae a 
subsisting and effective contract. Its unimpaired and unim- 
peached efficacy may be essential to his interests." 

The rule thus laid down must be regarded as subject to 
two limitations. 

Mast go to the whole performance. — The first is that 
the renunciation must deal with the entire performance to 
which the contract binds the promisor. In Johnstone v. 
MiUing^^ a tenant claimed damages of his landlord for 
breach of contract by repudiation of a covenant to rebuild 
the premises at a period of the tenancy which had not ar- 
rived when the repudiation was made. Though the deter- 
mination of this point was not necessary to the decision, the 
Coiirt of Appeal doubted whether the rule in Ilochster v. 
Delatour was applicable to cases where the renunciation did 
not go to the whole of the consideration. 

" The contract," said Lord Esher, M. R., " was the whole 
lease. The covenant in question is a particular covenant in 
the lease, not going to the whole consideration. If there 
were an actual breach of such a covenant at the time fixed 
for performance, such breach would not, according to the 
authorities, entitle the tenant to throw up his lease. That 
being so, I do not hesitate to say, though it is not necessary 
m this case to decide the point, that an anticipatory breach 
would not entitle him to do so, and that it does not appear 
to me that he could elect to rescind part of the contract." 

The promisee must treat renunciation as a discharge. — 
The second is that if the promisee will not accept the re- 
nunciation, and continues to insist on the perform- 
ance of *the promise, the contract remains in ex- [*283] 

a.I..]L7BnsiL«Sp.U4 
ft. ltQ.B.I>.«aiL 



179 dBGHABGB OF CONTRACT. Ftatr 

wtenoe for the benefit and at the risk of both parties, and if 
anything occur to discharge it from other causes, the prom- 
isor may take advantage of such discharge. 

Thus in Avery v. Bowden,^ A agreed with X by charter- 
party that his ship should sail to Odessa, and there take a 
cargo from X's agent, which was to be loaded within a 
certain number of days. The yessel reached Odessa, and 
her master demanded a cargo, but X's agent refused to 
supply one. Although the days within which A was en- 
titled to load the cargo had not expired, his agent, the 
master of the ship, might have treated this refusal as a 
breach of contract and sailed away. A would then have 
had a right to sue upon the contract But the master of 
the ship continued to demand a cargo, and before the ^l^ 
ning days were out — before therefore a breach bynon 
performance had occurred — a war broke out betweer 
England and Russia, and the performance of the contraoi 
became legally impossible. Afterwards A sued for breaob 
of the charter-party, but it was held that as there had beer 
no actual failure of performance before the war broke out 
(for the running days had not then expired), and as the re 
nunciation of the contract had not been accepted as » 
breach by J.'s agent, X was entitled to the discharge of the 
contract which took place upon the declaration of war. 

(2) Impa88{lnlUjf created by one jparty before perfarmcmoe 

is due. 

By making performanee impossible. — If a renunciation 
of his contract by A discharges Xand gives him a right of 
action before the time for performance has arrived, it wonld 
appear that a fortiori a similar discharge and right of 
action accrues to X if ^, before the time for performance 
arrives, makes it impossible that he should perform his 
promise. 

A promised to assign to X, within seven years from the 

date of the promise, all his interest in a lease. Be- 

[*884] fore the end *of seven years A assigned his whole 

a.SS.«B.n4. 



111.81. BYBBEAGH. 87S 

interest to another person. It was held that X could 
sae at once, without waiting until the end of seven years.* 
*' The plaintiff has a right to say to the defendant. You 
ha\re placed yourself in a situation in which you cannot 
perform what you have promised; you promised to be 
ready during the period of seven years, and during that 
period I may at any time tender you the money and caU 
for an assignment, and expect that you should keep your- 
self ready; but if I now were to tender you the money, 
yoa would not be ready; this is a breach of the contract."^ 
The cases just cited illustrate the rule that a contract 
may be broken while it is yet executory, and before any 
performance on either side has fallen due. They are com- 
paratively simple, because the circumstances leave no doubt 
of the intention of the party in default; their interest lies 
in the enforcement of the principle that performance of a 
promise is not all that a promisee is entitled to, that the 
continuous liability of the promisor, until the time for per- 
forqiance arrives, is a substantial element in the rights aris- 
ing from the contract, and that a refusal to maintain this 
liability is an immediate breach and confers an immediate 
right of action. 

(3) Renwaoiaition in the course of performanoe. 
Renunciation during performance. — It may also happen 
that in the course of performance one of the parties may 
by word or act deliberately and avowedly refuse perform- 
er liOTelock T. FkaoUyn, 8 Q. B. 871. 

1 It should be noted that the deciBion in Lovelock t. Franklyn was 
baaed on the fact tliat the option as to the time, within the seren yean, 
was with the plaintiff. In this particular contract the defendant undei^ 
took to keep himself ready for the whole time. The case is foUowed in 
Crabtree v. Messersmith, 19 la. 182; Lovering t. Lovering, 18 N. H. 
618; Wolf ▼. Marsh, 64 Cal. 228; Christ t. Armour, 84 Barb. 887. On 
the same principle where one is bound to perform on demand, yet no 
demand is necessary where he has voluntarily put it out of his power 
to perform. Delamater v. Miller, 1 Cow. 76; Boyle t. Guysinger, 19 
Lod. 273; Bassett ▼. Baasett, 66 Me. 127; Smith ▼. Jordan, 18 Minn. Mi. 



174 DISCHAfiOE OF CONTRACT. P^V 

anoe of his part. He may do this by renonncing the con- 
tract, or by rendering it impossible of performance. The 
other party is then exonerated from a continued perform- 
ance of his promise, and is at once entitled to bring action. 

An illustration of such a discharge by renunciation of the 
contract is furnished by the case of Cart v. The Ambergate 
Hailway Company,* The plaintiffs contracted with the 
defendant Company to supply them with 3,900 tons 
[*2851 of railway *chairs at a certain price. The chairs 
were to be delivered in certain quantities at specified 
dates. After 1,787 tons had been delivered, the defendants 
desired the plaintiffs to deliver no more, as they would not 
be wanted. Action was brought u]x>n the contract, the 
plaintiffs averring readiness and willingness to perform their 
part, and that they had been prevented from doing so by 
the Company. They obtained a verdict, but the Company 
moved for a new trial on the ground that the plaintiffs 
should have proved not merely readiness and willingness 
to deliver, but an actual delivery of the chairs. 

The Court of Queen's Bench held that where a contract 
was renounced by one of the parties to it, the other party 
need not do more than show that he was willing to have 
performed his part. And the principle of the decision was 
thus stated : — 

" When there is an executory contract for the manufact- 
aring and supply of goods from time to time, to be paid 
for after delivery, if the purchaser, having accepted and 
paid for a portion of the goods contracted for, grves notice 
to the vendor not to manufacture any more as he has no oc- 
casion for them and will not accept or pay for them, the 
vendor having been desirous and able to complete the con- 
tract, he may, without manufacturing arid tendering the 
rest of the goods, maintain an action against the purchaser 
for breach of contract; and he is entitled to a verdict on 
pleas traversing allegations that he was ready and willing 
to perform the contract, that the defendant refused to ao 

•. 17Q.&1A 



Ghapw m. § Sw BT BREACH. 975 

oept the residue of the goods, and that he preyented and 
discharged the plaintiff from manufacturing and delivering 
them." » 

(4) Impassibility orecUed h/ one party in the course qf per- 
formance. 

Impossibility created during performance. — The rule 
of law is similar in cases where one party has by his own 
act made the contract impossible of performance. 

In Planche v. Colium* the plaintiff was engaged 
by the defendants for £100 to write a treatise on [♦286] 
" Costume and Ancient Armour " to be published in • 
» serial called " The Juvenile Library." The plaintiff in- 
curred expense in preparing his work and actually completed 
a portion of it, but before it was delivered to the defend- 
ants they had abandoned the '^ Juvenile Library " on the 
ill-success of its first numbers. The plaintiff sued the de- 
fendants on the special contract and also on a qiuintum 
nheruit for the work and labour expended by him on hii 
treatise. He thus set up two distinct contracts, the original 
executory contract for the breach of which he claimed 
damages, and a contract arising from the execution of work 
upon request, under which he claimed the value of so much 
as was done before the contract was put an end to by the 
plaintiff. 

It was argued that he could not recover upon this latter 
aspect of his claim because his part of the original contract 

a.8Bliis. 14 

iCort T. Ambergate Railway Co. has been generally followed in thia 
eoontry. In Hosmer t. Wilson, 7 Mich. 804, Christianoy, J., it was said 
that an absolute refusal to accept goods ordered, although the goods 
were not in readiness for delivery, should be considered in the same 
yight, as respects plaintifiTs remedy, as an absolute, physical prevention 
by defendants, and that the plaintiff might bring his action in such a 
case before completing the goods ordered and tendering a performance 
on his part. Derby ▼. Johnson, 21 Vt 31 ; Haines ▼. Tucker, 50 N. H. 
til ; Smith v. Lewis, 24 Conn. 624 ; Qement ▼• Mcflflorole, 107 Mast. SOS; 
OoUina ▼• Delaporte» 116 Mass. 16a 



t7« DISCHABOE OF OONTRACT. Put V. 

being anperformed, thftt contract was not wholly at ai 
end: but the Court held that the abandonment of the pub- 
lication in question did put an end to the contract and 
effect a discharge. 

^' I agree," said Tindal, O. J., ^ that, when a special con- 
tract is in existence and open, the plaintiff cannot sue on 
a juofitum meruit; part of the question here, therefore, 
was whether the contract did exist or not. It distinctly 
appeared that the work was finally abandoned; and the 
jury found that no new contract had been entered inta 
Under these circumstances, the plaintiff ought not to lose 
the fruit of his labour." ^ 

(6) Breach ly failure qf perfarmanoe. 

In the two cases of discharge last dealt with it is appa^ 
ent that X has in word or act so dealt with the contract as 
to intimate to A that a further performance on his part is 
needless. The Courts have been asked in these cases to de- 
cide whether A is bound to tender a performance which 
he well knows that X will not or cannot accept, and they 
have decided that he is not so bound. 

Breach by failure of performance, how deter- 
[•287] mined. — *But where the breach of contract by X 
does not make the contract wholly incapable of per- 
formance, or is not accompanied with any overt expression 
of intention to abandon his rights, it is not always easy to 
determine whether A is thereby discharged or whether he 
merely acquires a right of action from the breach. We have 
to look to the terms of the contract and endeavour to as- 
certain the intention of the parties as to the nature of their 
respective promises; and the difficulties resolve themselves 
into this question — Were the promises of the parties inde- 
dependent of or conditional upan^ one another f 

iHawley ▼. Keeler, 68 N. Y. 114; Woolner ▼. HOI, 08 N. T. 581; 
Smith V. Bowe, 7 GoL 95; Rankin t. DameU* 11 B. Mon. 80; 68 Am. 
Dta 667; LoyeU v. St Louis Mut life Ins. Cio. Ill U. & 861 



BY BBEAGH. fH 



Independent Promises. 



A promise may be independent in several ways. 

(a) A promise may be aisduts. 

A^B promise to X may be wholly unconditional upon the 
performance by X of his promise to A. In sach a case a 
failure of performance by X would not discharge Ay but 
would only furnish ground for an action against X. 

{h) The performance of a promise may be divisible. 

The promise may be susceptible of more or less complete 
performance; and the damage sustained by an incomplete 
performance or partial breach may be apportioned according 
to the extent of failure. The promise is in fact regarded 
as a number of promises to do a number of similar acts, and 
a breach of one or some of these does not discharge the 
promisee. 

{c) A promise may be subsidiary. 

The breach committed by one of the parties may be a 
breach of a term of the contract only, and of a term which 
the parties have not, upon a reasonable construction of the 
contract, regarded as vital to its existence. The injured 
party is then bound to continue his performance of the con- 
tract, but may bring action to recover such damages as he 
has sustained by the default of the other. 

^AhaclaU Promises. 

In alisolate promises^ one party relies on the 
promise and not its performance by the other.— *If [*288] 
A make a promise to Xin consideration of a promise 
made by Xto ^, and A has not, in express terms, or upon 
a reasonable construction of the contract, made the perform- 
ance of his promise depend upon the performance of X^s 
promise, a breach of his promise by X will not discharge A. 
The position of A is this: his promise is given in considera- 
tion of Xs promise, not in consideration of the performance 
by X of his promise: in other words, he has been content 



ITS DISCHABQE OF OONTRACT. FtetY 

with Z^8 liability, and has not insisted upon X^s perfonn- 
ance as a security for his promise.' 

Some of the old cases upon this subject turn upon yery 
technical constructions of terms: if A make a promise to Jl 
in consideration of its being '^ agreed ^ ^ that X do something 
for Ay each promise is regarded as absolute and independent 
of the other: if the promise be made ^^ provided " that X do 
something for A^ the promise of ^ is conditional, and is dis- 
charged on failure of performance by X 

An old case (1649) furnishes a good instance of such ab- 
solute promises.* ^'Ware brought an action of debt for 
£500 against Chappell upon an indenture of covenants be- 
tween them, viz. that Ware should raise 500 soldiers and 
bring them to such a port, and that Chappell should find 
shipping and victuals for them to transport them to Galicia; 
and for not providing the shipping and victuals at the time 
appointed was the action brought The defendant pleaded 
that the plaintiff had not raised the soldiers at that time; 
and to this plea the plaintiff demurs. Bolle, 0. J., held that 
there was no condition precedent, but that they are distinct 
and mutual covenants, and that there may be several actions 
brought for them : and it is not necessary to give notice of 
the number of men raised, for the number is known to be 
500 ; and the time for the shipping to be ready is also known 
by the covenants; and you have your remedy against him 
if he raise not the men, as he hath against you for not pro- 
viding the shipping." 
[*289] Reasons assigned for rule.— *The reason for 
holding such promises to be abedvU is thus stated 
by Holt, 0. J. : — '' What is the reason that mutual promises 
shall bear an action without performance? One's bargain 

•. RoUe, Abr. L 518. 

h. Wars ▼. Chappell, Style, ISOL 

' Where promisee in a contract are independent, and performanoe if 
not to be concurrent, either party may recover for a breach thereof with- 
out showing performance on hia part. Qould ▼• Banks, 8 Wend. 660; 
D9f ▼• Doz, 9 Wend. 120. 



Cbap. m. S ^ BY BREACH. 971 

11 to be performed according as he makes it. If he makes 
a bargain, and rely on the other's covenant or promise to 
have what he woald have done to him, it is his own fanlt 
If the agreement be, that A shall have the horse of By 
and A agree that B shall have his money, they may make 
it so; and there needs no averment of performance to main- 
tain an action on either side; but if it appear by the agree- 
ment that the plain intent of either party was to have the 
tbing to be done to him performed before his doing what 
he undertakes of his side, it mast then be averred ; as where 
a man agrees to give so much money for a horse, it is plain 
he meant to have the horse first, and, therefore, he says the 
money shall be given for the horse."* 

And another reason is suggested by Willes, O. J., in 
Tho7na8 V. Cadwaildder,^ namely, *' When two covenants in 
a deed have no relation to each other, I was clearly of 
opinion that the non-performance of one conld not be 
pleaded in bar to an action brought for the breach of an- 
other covenant in the same deed; and for this plain reason 
amongst others, that the damages sustained by the breach 
of one such covenant may not be at all adequate to the 
damages sustained by the breach of the other." • 

Tendency of modern decisions. — The cases dating from 
the close of the last century seem to show a tendency of the 
Courts not to construe promises to be independent of one 
another, where they form the whole consideration for one 
another, unless there be some very definite expression of 
the intention of the parties to that effect. ^^The older 
cases," says Grose, J., in Olaaebrooh v. Woodrow^* " lean to 
construe covenants of this sort to be independent, 
^contrary to the real sense of the parties and the [*2903 
true justice of the case;" and the interpretation of 

•^ Thorpe t. Thorpe, 12 Mod. Bep. 4BBw 

h, Wniea. 496. 

c But this view of the matter la oertalnlj opeo to the eritloisra paated upon ft Vt *« 
▲oaerlcan Jud^: — ** Oourte are not requh^ to speculate upon the faieqiualitj ot lots 
to the parties, or to look beyond the agreement to Its performance in order to asoertulb 
Its character, as suggested by some Judges and oammimtstowi** Fw flsiillaii, J., k 
Ursai t. Johnson, Langdell, QSOl 

A •T.B.aes. 



180 DISCHABOE OF CONTRACT. Flirt V. 

snoh promises may now be taken to rest upon ^the good 
sense of the case and the order in which the things are to 
be done."* 

The order in which the things are to be done wonld ap- 
pear now to be the main test of the existence of snch abso- 
lute promises. Thus where X makes a promise to Aj the 
date of performance not being fixed, and A in consideration 
thereof promises to pay a sum of money to X at a fixed 
date, the payment is independent of performance. 

In March, 1879, A agrees to purchase land of Xand cove- 
nants to pay a sum of money on the 1st of April, 1879. X 
covenants in turn to convey the lands to A^ but no day is 
fixed for the execution of the conveyance. So soon as the 
1st of April is passed, Xcan sue A for the money, and it is 
no answer to his claim that he has never conveyed, or of- 
fered to convey the land to X And so the law is laid down 
in MaUook v. Kinglake^^ where the &ot8 were such as those 
just described: — 

^' A time being fixed for payment, and none for doing 
that which was the consideration for the payment, an ac- 
tion lies for the purchase money without averring perform- 
ance of the consideration." ' 

But, upon the whole, it may be safe to say that, in the 
absence of very clear indications to the contrary, promises 
each of which forms the whole consideration for tiie other 
will not be held to be independent of one another. A fail- 
ure to perform the one will exonerate the promisee from a 
performance on his part^ 

«. Pior Loid Kenjon, a J., in Morton ▼. Lamb, 7 T. a Uft. 

». 10 A. ft B. sa 

CL For Uttledala, J., in Ifattook t. KInflrUlm, 10 A. * E. A 

1 See rules of Sergeant WiUiamg considered at length in 8 Snodth, L 
C. (H. & W. notes), 24; Dej t. Doz, 9 Wend. 1S9. " Althoagh many 
nice distinctionB are to be found in the books upon the question whethef 
the oovenantB or promises of the respective parties to the contract are to 
be considered independent or dependent, yet it is evident the inciinatioD 
of the courts has strongly favored the latter construction as being ob- 
viously the most just** Bank of Columbia v. Hagner, 1 Paten^ 415; 
Hamilton v. ThraOl, 7 Neb. SIS; Soheland v. Erpelding, • Ong. S68; 



dAPblUglL BT BREACH. 



Pr&misea the perfarmanoe of which is divisible. 

Contracts freqaently occur in which the promise of one 
or both parties admits of a more or less complete perform- 
ance; such would be a contract by way of charter-party to 
load and deliver a complete cargo; or a contract for the 
sale of goods in which delivery and acceptance are 
to take *place by instalments extending over a con- [*291] 
siderable period of time. 

A partial breach is no discharge. — In contracts of this 
nature it may be laid down as a general rule, that a breach, 
which only deprives the promisee of a part of that to which 
he was entitled, does not discharge him from such perform- 
ance as may be due from him. 

In Ritchie v. Atkinson^ the plaintiff promised to take his 
ship to St. Fetersburgh and there load a complete cargo of 
hemp and iron, and to deliver the same on being paid 
freight at specified rates. He came away with an incom- 
plete cargo, under a mistaken impression that an embargo 
was about to be laid on British ships, and the defendant 
refused to pay any freight, on the ground that the complete- 
ness of the cargo was a condition precedent to any payment 
being due. 

Where performance is divisible. — Lord EUenborough 
said that whether it was so, or no, depended " not on any 
formal arrangement of words, but on the reason and sense 
of the thing as it is to be collected from the whole con- 
tract;'' and with regard to the promise before us, he held 
that ^ where the freight is made payable upon an indivisi- 
ble condition, such as the arrival of the ship with her cargo 
at her destiiied port of discharge, such arrival must be a 
condition precedent; because it is incapable of being appor* 

a. 10EMt»9«L 

■ .11111 

Qoigley t. De Haas, 83 Pa. St 667; Lutz ▼. Thompson, 87 N. C. 834. 
The order in which the things are to be done is made the test in Front 
Street R. R. Go. t. Butler, 50 CaL 674; State ▼. Winona R. R. Ca 3] 
Minn. 474; M0C07 t. Bixbee, 6 Ohio, 813 ; Gouoh ▼. IngenoU, 8 Pick. 88a 



sat DisciiABaE OF ooNTRAor. Put v. 

tioned: hut here the delivery of ike cargo is in its nature di- 
visible^ and therefore I think it ie not a condition precedent; 
bat the plaintifiF is entitled to recover freight in proportion 
to the extent of such delivery; leaving the defendant to his 
remedy in damages for the short delivery." 

Instalment contracts. — The case of Simpson v. Orippin * 
was decided upon similar grounds. In that case A agreed 
with X to supply him with a given quantity of coal to be 
delivered in equal monthly instalments for twelve months. 
X agreed to send waggons to receive the coaL Xdid not 
during the first month send waggons enough to receive one- 
twelfth of the coal. A rescinded the contract. It was held 
that he was not entitled to do so, inasmuch as X was will- 
ing to continue the contract as to the remaining in- 
[*292] stalments, and it did not appear to have been *the 
intention of the parties to determine the contract 
upon the failure of one of the parties to fulfill one of a series 
of terms. 

Later oases than Simpson v. Crippin^ show that it is very 
difficult to lay down any general rule as to the divisibility 

<k L. B. 8 Q. a li. 

1 Instalment eontraets.— Simpson ?. Crippin has occasioned much 
discussion. It is usuallj compared with Hoare t. Rennie, 6 fiL ft N. I9» 
which some American courts prefer to follow. The action in Hoare t« 
Rennie was upon a contract to ship six hundred and sixty-scTen tons of 
bar iron from Sweden to London, in June, July, Aug^t and Septem- ' 

ber, in about equal portions each month, at a certain price payable on i 

delivery. The seller, plaintiff in the action, shipped about twen^ tons I 

only in June, and failed to complete the shipment for that month ao 
oording to the contract. Defendants refused to receive the twenty tons 
and gave notice that they would not accept the rest. Judgment was 
giTen for the defendants in the action to reoover damages for failure to 
accept the iron purchased. Pollock, G. B., saying: "The defendants 
had the right to say that this was no performance of the contract, and 
they were no more bound to accept the short quantity than if a single 
deliyery had been contracted for." These cases are in direct conflict, and 
it is difficult to determine which one is followed by the weight of Amer* 
ioan authority. Mr. Benjamin says: " In America the law appears to 
be fairly settled in accordance with the decision in Simpson v. Crippin.** 
Benj. on Salea» sea 909; and Mr, Landreth» in his review of NorringtOB 



Chap. m. § 8. BT BREACH. 888 

of contracts. The cases of Brandt v. Lawrence * and Reuter 
V. Sola * may be referred to as illastrations of the fineness 
of the distinctions drawn. Bat the case which may best be 
compared with Himpscn v. Orippm is that of Uonck «. 
MuUer^ where failure to deliver the first of a series of in 

•.iQ.B.D.(aA.)84i. 
k 4O.P.D.(aA.)880L 

& 7Q.aD.«a. 

T. WiislKt, infroj oomes to the same oondusion — this review was wri^ 
(en, however, while the case was pending in the United States supreme 
ooort — 21 Law Rep. 898. But Mr.Corbin, in his edition of Benjamin on 
Sales, expresses a contrary opinion regarding the weight of American 
authority, and he is sustained, in his view, by the reoent decision od the 
United States supreme court. The following cases accord with Simp- 
son V. Grippin: Scott v. Eallaning Coal Co. 89 Pa. St. 281; Morgan v. 
HcKee, 77 Pa. St 228; Cohen v. Piatt, 69 N. Y. 848; and Mr. Landreth, 
in his note to Norrington v. Wright, cites many other cases, wiuch do 
not, however, pass on the right of rescission, but are simply illustrative 
of the disposition of courts, under certain circumstances and for vari- 
oos reasons, to treat contracts which have been partially performed, as 
•everable rather than entire. The fact that a single contract may be 
rsgarded by the courts as severable for certain purpuses does not estate 
^ish that the same contract is made up of several contracts, distinct and 
independent for all purposes. See 21 Am. Law Reg. 879, opinion of 
Butler, J., in Norrington v. Wright, U. 8. C C Eastern District Of 
Pennsylvania. The following cases expressly disapprove of Simpson ▼• 
Crippin: King Phillip MiUs v. Slater, 12 R. L 82; Norrington ▼• 
Wright, 116 U. & 211. See, also, Hdl v. Blake, 97 N. Y. 221; Welsh 
7. Qossler, 89 N. Y. 640; Catlin v. Tobias, 26 N. Y. 217; Smith v. Lewis, 
40 Ind. 98; Dwinell v. Howard, 80 Me. 268; Robson v. Bohn, 27 Minn. 
388; Bradley v. King, 44 III 889; Hill v. Chipman, 69 Wis. 218; Boll- 
man v. Burt, 61 Md. 416. 

Norrington f. Wright is an important case, and may be said to have 
cast the weight of American authority against Simpson v. Crippin. 
This was an action upon a contract wherein N., the plaintiff, agreed to 
ship from European ports to W., the defendant, at Philadelphia, five 
thousand tons of old T iron rails, at the rate of about one thousand tons 
[ler month, beginning February, 1880. The February and March ship- 
ments fell short, the plaintiff having shipped only four hundred tons in 
Ff^hmary. On learning of this W. gave notice of rescission of the con- 
'.ract and declined to receive the remaining instalments. N. brought 
iiuit. n&e court held that the shipment of one thousand tons per month 
was a condition preoedent, upon the failure or non-performanoe of 
whkh the party aggrieved might repudiate the whole oontraok Jnstioe 



Wi DI8CHABOE OF CONTRiLCT. PttI ▼ 

italments of goods was held to operate as a discharge. 
There were bat three instalments, each of a large amount. 
Bramwell, L. J., distinguished the facts from those m Simfp- 
$an V. Orippin; BaggaUay, L. J., was prepared to OTerrole 

Gfej, delivering the opinion of the court, considers the English cases al 
length, and comes to the conclusion that Hoare ▼. Rennie is supported 
bj the greater weight of authority in England and America, and disap- 
proves of Simpson v. Crippin. For a recent decision of the Hoose of 
Lords in accord with Simpson v. Grippin, see Mersey Co. v. Naylor, 9 
Q. B. Div. 648 ; 9 App. Gas. 484. Followed m Blackburn v. Remj, 47 N. 
J. L. 808 (1885) ; Trotter ▼. Heckscher, 40 N. J. Eq. 656. See Tucker ▼. 
Billing, 8 Utah, 82. Whatever may be the weight of authority on this 
question, certain principles are generally reoogmzed in determining the 
right of rescission in this class of contracts. 

1st A contract may be regarded as entire and indivisible in its nature^ 
although the subject of the contract consists of several entire things* 
to which certain values are affixed, and which are to be performed ai 
different times; and when so regarded, the aggrieved par^ has the 
right to rescind on a breach of any essential term of the contract. 
Thompson v. Conover, 82 N. J. L. 468; Smith v. Lewis, 40 Ind. 98. 

9d. Though the contract call for performance by instalments and be 
severable or divisible in its nature, still the right of xescissioo may be 
exercised on failure to perform an instalment. 

(a) When by express terms of the contract performance of each stip* 
ulation is made a condition precedent to the continuing obligations of 
the contract Cutter v. Powell, mipra; Tyson ▼• Doe, 16 Yt 671 ; Nor* 
rington v. Wright, mpna. 

(b) Where it is evident, from the nature and circumstances of the 
bargain, that the regular performance of each stipulation was an induce- 
ment to the contract, and " so went to the root of the matter as to make 
its performance a condition of the obligation to proceed in the contract** 
Gatlin v. Tobias, 26 N. Y. 221; Norrington ▼• Wright, ntpn: Jennen 
V. Shaw, 85 Mich. 20. 

(c) Where the conduct of the party in default Is such as to evince an 
intention to abandon the contract or a design no longer to be bound hy 
its terms. Blackburn v. Reilly, 47 N. J. L. 808; Haines v. Tucker, 50 
K. H. 807 ; Stephenson v. Cady, 117 Mass. 6. The New York courts hav« 
been regarded as governed in their decisions by Simpson v. Grippin, but 
hi a recent case the court of appeals considers that a contract may be 
called divisible or distributive for certain purposes and still be treated 
as entire for the purpose of determining the right of rescission. The 
case of Norrington v. Wright is approved, Finch, J., saying: **Th!& 
reasoning of that case seems to us accurate and dedalTe^ and we follow 
it without hesitation.** Pope t. Porter, 102 N. Y. 871. 



Chap. m. 8 ^ BY BBEAGH. <8B 

that case; Brett, L. J., rested his dissenting jndgment on its 
authority. In fact the law as to these contracts to deliver 
bv instalments is not settled. 

Default in one instalment maj show intent to break 
contract. — But it is clear that if a default in ofte item of a 
oontinuous contract of this nature oe accompanied with an 
announcement of intention not to perform the contract 
upon the agreed terms, the other party may treat the con- 
tract as being at an end. And m like manner,* if non- 
payment of one instalment of goods be accompanied by 
circumstances which give the seller reasonable ground for 
thinking that the buyer will not be able to pay for the rest, 
he may take advantage of the one omission to repudiate the 
contract.* 

Or be made a discharge by terms of contract. — And 
the general rule applicable to contracts of this sort may be 
contravened by express stipulation. It is always open to 
the parties to agree that the entire performance of a con- 
sideration, in its nature divisible, shall be a condition prec- 
edent to the right to a fulfillment by the other party of his 
promise. In such a case nothing can be obtained either 
npon the contract or upon a jttarUum meruU for what has 
been performed. 

In OuUer v. Powell^* a sailor being at Jamaica, took a 
promissory note from the master of his ship to the follow- 
ing efiFect : '^ Ten days after the ship Governor Parry, myself 
master, arrives at Liverpool, I promise to pay to lAr. T. 
Cutter the sum of thirty gamesAy provided he pro- 
eeedsj continues *and does his duty as second mate in [*398] 
the shipfrcm hence to the port of Liverpocl. Kingston, 
July 81st, 1793." The sum agreed to be paid was larger than 
the ordinary wages of a mate. The ship sailed on the 2nd 
of August, and reached Liverpool on the 9th of October; 
the sailor did his duty as second mate until the 20th of 
September, when he died. It was held that his r^reseatir 

«. WUlMnT. B«7iu>l<lB. 9 B. ft Ad. 681 
li BkMiMr V. Be^Mtab^ L. & 9 a P. 868. 
«.tT.B. t»;MidsM 8a. L. a 11,1, audi 



m DISCHARaE OF CONTBACX Furl T. 

tives ooald not recover apon the express oontraot, for its 
terms were anfultilled; nor could they recover upon a 
quantum meruit for such services as he had rendered, be- 
cause the terms of the express contract excluded the arising of 
any such implied contract as would form the basis of a claim 
npon a quantum meruit. '^ It may fairly be considered,** 
said Grose, J., *' that the parties themselves understood that 
if the whole duty were performed the mate was to receive 
the whole sum, and that he was not to receive anything un- 
less he did continue on board during the whole voyage." 

Subsidiary promisee^ 

We shall have to speak, in a later portion of this chapter, 
of subsidiary promises, or warrantiee as we will venture to 
call them, as distinct from conditions or terms on which the 
right to performance depends. But it is desirable to iUns- 
trate here the difference which exists between a subsidiary 
promise the breach of which cannot under any circumstancee 
operate as a discbarge, and a promise such as we have just 
described, which admits of being performed with more or 
less completeness, but which may be so completely broken 
as to discharge the promisee. 

A good instance of such a subsidiary promise is to be 
found in the case of Bettini v. Oye.^ There the plaintiff, a 
professional singer, entered into a contract with the defend- 
ant, director of the Royal Italian Opera in London, for the 
exclusive use of his services as a singer in concerts and 
operas for a considerable time and upon a number of terms, 

one of which was as follows: — 
[«394] *" (7) Mr. Bettini agrees to be in London without 
fail at least six days before the commencement of 
his engagement, for the purpose of rehearsals." 

How distinguished from conditions. — The plaintiff broke 
this term by arriving only two days before the commence- 
ment of the engagement, and the defendant treated this 



Chap. m. § t. BY BREACH. 887 

breach as a discharge of the contract. The Coart held that 
in the absence of any express declaration that the term was 
vital to the contract, it must ^4ook to the whole con- 
tract, and see whether the particular stipulation goes to 
the root of the matter, so that a failure to perform it would 
render the performance of the rest of the contract by the 
plaintiff a thing different in substance from what the de- 
fendant has stipulated for; or whether it merely partially 
affecte iij and may by compensated for in damagee.*^ And it 
was decided that the term did not go to the root of the maUer^ 
80 as to require to be considered a condition precedent 

And generally it may be said that where a promise is to 
be performed in the course of the performance of the con- 
tract and after some of the consideration, of which it forms 
a part, has been given, it will be regarded as subsidiary^ 
and its breach will not effect a discharge unless there be 
words expressing that it is a condition precedent, or unless 
the performance of the thing promised be plainly essential 
to the contract* ^^ Where a person has received part of 
the consideration for which he entered into the agreement, 
it would be unjust that, because he had not the whole, he 
should therefore be permitted to enjoy that part without 
either payment or doing anything for it. Therefore the law 
obliges him to perform the agreement on his part, leaving 
him to his remedy to recover any damages he may have 
sustained in not havmg received the whole consideration." ^ 

<k Fer Fute, B^ la Omvet t. Legg, 9 Bx. 71& 

1 Part performanee of entire contract.— This principle is unqucs- 
tioned where the contract is severable, but where the contract is entire 
and inditrieible, it is held, in New York, that a part performance gives 
the partj in default no remedy, unless there lias been a waiver of full 
performance. Grant v. Johnson, 6 N. Y. 247; Champlin t. Rawles, 18 
Wend. IM; but see Avery v. Wilson, 81 N. Y. 841. And the New York 
rule has been followed in Larkin v. Buck, 11 Ohio St. 661; Haslack v. 
Hayera, 26 N. J. L. 284; Clark v. Baker, 6 Met. 462; Holden Steam BliU 
Oo. V, Westervelt 67 Me. 446. But the tendency of recent decisions is 
toward a more equitable rule. As was said in Wilson v. Wagar, 26 Mioh. 
4H Ghristiaoi^y, Ch. J., " Where the articles delivered wen a pvi only 



DIBGHAfiGB OF OONTBACTL hit % 

Wftmnty of quality, when sulisidiary. — Another illu* 
tration of a subsidiary promise of this nature is to be found 
in the warranty of quidity in a sale of goods. 

Where a contract of sale is executory, so that the prop- 
erty in the chattel has not passed to the buyer, and the 
terms of the sale include a promise that the chattel 
[*S95] shall ^possess a particular quality, the acceptance of 
the chattel by the bayer is conditional on its possesa- 
ing that quality. Haying promised to take, and pay for an 
article of a particular sort, he is not obliged to receive one 
which is not of the sort he bargained for.* 

But if the contract of sale be executed, as being, in its in- 
ception, such a bargain and 9ale of a specific chattel as was 
described in an earlier chapter, the promise as to quality 
becomes tubsidiary. For, the property having passed, the 
buyer can only reject the goods if there be an express con- 
dition that he should do so (as in Read v. TaUer^aU)^* or 
possibly in the event of the goods being different in descrip- 
tion to the terms of the agreement^ or wholly worthlees in 



I M SalM, 748; MiK p. M; aMi Me Baojamln, Bk. 11, dL 1, a 
ft.Ii.&7BJLr. 

€l thoseagreed to be furnished upon a speoial oontraot, which was en- 
tire in ill natoie, proTiding one gross sum for the whole* y^et the deiiTery 
ol a part cf the contracted articles only, and the defendant's aoceptanoe 
and appropriation of theee, had conferred a benefit upon him, and created 
a oonrespondingduty or implied contract, separate from and independ- 
CDi of the special contract, to pay what such deliyered portion was rea- 
sonably worth; leading to the defendant the right to recoup in this 
action, or to recover in another such damages as he might be able to 
show he had sustained by the plaintiff's failure to perform the special 
oontraot" Brittan ▼. Turner, 6 N. H. 481; Wolf t. Qerr, 43 la. 889; 
Biohards t. Shaw, 67I1L 823; Lee ▼. Ashbrook, 14 Ma 878; Hollis t. 
Chapman, 86 Tex. 1 ; Duncan ▼. Baker, 81 Kan. 99; Blood t. Enos, 13 
Yt 636; Byan ▼. Dayton, 86 Conn. 188; Bast t. Byrne, '61 Wis. 687; 
Pizler T. Nichols, 8 la. 106; Byerlee t. Mandell, 89 la. 883; Ft:9sll ▼« 
MoComber, 11 Neb. 309; Murphy t. St Louis, 8 Mo. Appw 488. Th» 
authorities upon this are numerous. They are oolleoted and r ef i e w e d 
In an able note by Mr. Corbin in 4th Am. El of BenjanuB CB Sala% m 
roLp^WL See Denton T.Atditen, 84 KaM. ML 



Ctep^IELIl BYBBEACa 881 

quality.* The promise as to quality is then a trorron^ in 
the strict sense of the term, ^ a stipulation by way of agree* 
ment, for the breach of which compensation most be sought 
in damages,"* in other words, a promise to indenmify 
ftgainst failure to perform a term in the contract. 

Conditional Promises. 

Conditional Promises are of three kinds.— We now 

oome to deal with conditional promises, and before we 
touch upon the sort of condition which is especially con- 
nected with the subject of discharge, it may be well to 
speak shortly of conditions in general 

If A make a promise to X which is not an absolute prom- 
ise, but subject to a condition, that condition must, as re- 
gards its relation to the promise in time, be either 9vh86quent^ 
concurrent^ or precedent, 

{!) In the case of a condition eubaeqtLent^ the rights .of X 
under J.'s promise are determinable upon a specified event. 
The condition does not affect the commencement of X*% 
rights, but its occurrence brings them to a conclusion. We 
have already dealt with conditions of this nature in speak- 
ing of the discharge of contract by agreement. 

(2) In the case of a condition concurrent^ the rights of X 
under J.'s promise are dependent upon his doing, or 
being *prepared to do, something simultaneously with [♦296] 
the performance of his promise by A. Such a condi- 
tion exists in the case of a sale of goods where no time is 
specified for the payment of the price; payment and deliv- 
ery are concurrent conditions, and the right of the seller to 
receive the price and that of the buyer to receive the goods 
are dependent upon the readiness of each, the one to deliver 
and the other to pay.^ 

(8) In the case of a condition precedent^ the rights of X 
nnder J.'s promise do not arise until somethinj^ has been 

•l 8m port, p. 2M. 

h. Behn t. Burneas, S B. & & p. TSi. 

* FwBajl^, J.,tiiBkMCUBT.SaBd«i»4B ACML 



no DISCHABOB OF OONTRACT, Ptat T. 

done, or has happened, or some period of time has elapsed. 
Bat in dealing with conditions of this nature we must note 
that they are of two kinds, and that with one of these we 
are not here immediately concerned. 

(1) Conditions which do not discharge — Floating or 
suspensory conditions. — We must distinguish conditions 
which suspend the operation of a promise until they are 
fulfilled, from conditions the nou-fulfillment of which is a 
cause of discharge. It is perhaps permissible to call the 
torm&r floating conditions, as opposed to conditions the per- 
formance of which is fixed by time or circumstances. It 
may be well shortly to illustrate the character of such con> 
ditions. 

The happening of an erent* — A promise may be condi- 
tional on the happening of an uncertain event, as in the 
case of the underwriter whose liability accrues upon the loss 
of the Tcssel insured.* Or it may depend upon the act of a 
third party, as in the case of a promise in a building con- 
tract to pay for the work upon receiving a certificate of ap- 
proval from the architect Such promises might be called 
contingerU rather than conditional^ for they depend for their 
operation on events which are beyond the control of the 
promisee and which may never happen. 

The lapse of time. — Again, a promise may be conditional 
in the sense that its operation is postponed until the lapse 
of a certain time — as in the case of a debt for which a fixed 
period of credit is to be given — or until the happening of 
an event that is certain to happen, as in the case of an in- 
surance upon life. 

The act of the promisee. — Or again, a promise may be 
conditional in the sense that its operation awaits the 
[•297] performance of some act to be done *by the prom- 
isee. If no time is specified within which the act is 
to be done, the non-fulfillment of the condition merely sus- 
pends and does not discharge the rights of the promisee. 
Oommon illustrations of such conditions are furnished by 

9Btiif.«2B. 



Cbapi. m. I Sl by BBBAGH. M 



of promises conditional upon demand or notice. A 
may promise Xthat he will do something upon demand: 
he cannot then be sued until demand has been made. Or 
A may promise Xthat he will do something upon the hap- 
pening of an event, and he may stipulate that notice shall 
be given to him of the event having happened. Or it may 
be that the happening of the event is peculiarly within the 
knowledge of X, and then an implied condition would be 
imported into the contract that notice must be given to A 
before he can be sued upon his promise.* 

In all these cases it would appear that an action brought 
apon the promise, before the fulfillment of the condition, 
would be brought prematurely; and though neither the 
non-fulfillment of the condition, nor the action brought be- 
fore it was fulfilled, would discharge the contract, the con- 
dition suspends, according to its terms, the right to the 
performance of the promise.* 

(2) Cotaditions precedent which may effect discharge. — 
But the conditions with which we are concerned effect a 
discharge of contract by their breach, if not performed at 
a fixed time or within a reasonable time from the making 
of the contract; and the breach of such a condition is the 
breach of a term expressly made, or necessarily implied in 
the contract, whereby one party loses either the whole or 
an essential part of that in consideration of which he made 
his promise. 

And so we may say that where ^^s promise to 2^ is a 
conditional and not an absolute promise, he may be dis- 
charged — 

(1) By the failure of 2^ to perform a '^ concurrent con- 
dition," L e. to do something or to be ready to do some- 
thing which should be simultaneous with the performance 
of his promise by A. 

(2) By the fact that there has been a total or substan- 
tial failure on the part of X to do that which he 






809 DISGHABOE OF OONTBACT. FurlV 

[*298] bound to *do under the contract — a state of thingt 
which we may describe as virtaal failure of consid- 
eration. 

(3) By the antruth of some one statement or the breach 
of some one term which the parties considered to be yital 
to the contract. 

Breach of Concurrent Condition. 

Concnrrent eonditions are mutnal conditions prece- 
dent* — Concurrent conditions seem, in point of fact, to be 
conditions precedent ; for the simultaneous performance of 
his promise by each party must needs be impossible except 
in contemplation of law. But what we mean by the phrase 
is, that there must be a concurrent readiness and willing- 
ness to perform the two promises, and that if one is noi. 
able or willing to do his part, the other is discharged.* 

This form of condition is more particularly applicable to 
contracts of sale, where payment and delivery are -asisumed, 
in the absence of express stipulation, to be intended to be 
contemporaneous. 

In Morton v. Lamh^ the plaintiff agreed to buy a certain 
quantity of corn of the defendant at a certain price, and 
the defendant promised to deliver the com within one 
month. The plaintiff alleged that he had always been 
ready and willing to receive the corn, but that it had not 
been delivered within the month. The Court held that 
readiness to receive was not a sufficient performance of his 
obligation by the plaintiff; that payment of the price was 
intended to be concurrent with delivery of the com. As 
the plaintiff did not allege that during the time in which 
delivery might have been made he had been ready to pay 
the price, there was nothing, as he had shaped his case, to 
show that he had not himself broken the contract and dis- 
charged the defendant by non->readiness to pay. 

And so the law is laid down by Bayley, J., in BUnoam ti. 






Obip.m.|t. BY BREACH. Ml 

Sand&ra:^ — ^ Where goods are sold, and nothing is said as 
to the time of the delivery or the time of payment, and 
everything the seller has to do with them is com- 
plete, the property *ve8ts in the buyer, so as to sub- [*299] 
ject him to the risk of any accident which may 
happen to the goods, and the seller is liable to deliver them 
whenever they are demanded upon payment of the price; bat 
the buyer has no right to have possession of the goods tiU 
he pays iheprice.^ * 

Breach ly Virtual Failure of ConsideraUon. 

It is laid down by high authority that ^^ where mutual 
promises or covenants go to the whole consideration on both 
sides, they are mutual conditions and performance must be 
averred." • 

By this we must understand that where A^% promise is 
the entire consideration for X's promise, then, in the ab- 
sence of any dear indication that Xis to perform his promise 
first, or that X, as the consideration for his promise, relied 
volely upon his right of action against Ay A will not be 
able to sue X unless he can aver that he has performed or 
is ready to perform his promise; and if performance is no 
longer possible for him within the terms of the contract^ X 
will be discharged.* 

It seems tolerably obvious that a total failure by ^ in 
performing that which was the entire consideration for X'i 
promise, and which should have been antecedent to 20b peit- 

•,4B.StaHl 

iu wnUams* Sauadfin, I, 566; Boone t. ICyro, 1 H. BL S7B, a. 

1 Allen T. Hartfield, 76 m. 858; Wabash Eleyator Ca t. Bank of Ti>>^ 
Mo^ 23 Ohio St. 311; Henderson y. Louck, 21 Pa. St. 859; Rossell t. 
Minor, 22 Wend. 659; Adams t. O'Connor, 100 Mass. 615; Stone ▼. Perry, 
60 Me. 48; Hodgson t. Barrett, 88 Ohio St. 68; Simmons ▼. Oreen, 85 
Ohio St 104; Turner t. Moore, 58 Vt. 455; Brunswick & Balke Co. ▼• 
Martin, 20 Mo. App. 158; Pierce y. Cooley, 56 Mich. 552. 

s Afl to the remedy where there haa been a part perfonnanoe only of 
an earlier oontraot^ aee 294, n. 



9H DISCHABaB OF OOlfTBAOI^ FtotT. 

fonnataoe of his promise, will exonerate X; but it will be 
well to note some of the less obvious applications of the 
rale, and to mark its effect in cases where the performance 
of a promise has been illusory and consideration for the 
promise of the other party has consequently failed. 

In cases of execntory contract of sale. — In every ex- 
ecutory contract of sale the buyer, if he has contracted for 
an article of a particular quality, is entitled to reject the 
article tendered if it do not correspond in quality with the 
terms of the contract. This however is a matter of express 
condition falling under the next and not the present head 
of conditional promises. But in the absence of express 
stipulations of this nature there are certain terms implied 
in every contract of sale which protect the buyer, if 
[*300] *he has not been able to inspect the goods, from the 
imposition upon him of an article different to that 
which he contracted to buy, or practically worthless and 
unmarketable. 

" In every contract to supply goods of a specified descrip 
tion which the buyer has no opportunity to inspect, the 
goods must not only in fact answer the specified descrip- 
tion, but must also be salable or merchantable under that 
description.'** 

Where goods do not answer to description. — Thus the 
buyer is not bound to accept goods which do not correspond 
to the description of the article sddy even though they do 
correspond to the sample by which they were bought 

In Nichol V. Oodtsf the plaintiff agreed to sell to the do 
fendant a certain quantity of foreign refined rape oU^ war- 
ranted only eqtial to samples; and the action was brought 
for the refusal by the defendant to accept, oil which corre- 
sponded to the samples, but which turned out not to be 
foreign refined rape oil. It was held that he was entitled to 
be discharged from the contract,^ inasmuch as the nature of 

tL JooMV. Ji]irt,L.a.8Q.B.197. 
h. 10XzolLl91. 

r V. OmsIU, L. a. Sa P. 4aiaMl«l 



Cbmpk m. § t. BT BREACH. »i 

the Article delivered was difFerent from that which he had 
ag^reed to bay.^ 

Or are not marketable. — On the same principle, in 
Laing v. Fidgean * a contract to supply saddles was held to 
be discharged, and the purchaser exonerated from receiving 
the goods, on the ground that they were not of a merchant- 
able quality. 

In cases of executed contract of sale. — In the case of 
an executed contract of sale, in which the property in the 
article sold has passed unconditionally to the buyer, there 
does not seem to be expr^ authority to the effect that the 
terms, imported into all executory contracts of sale in which 
the buyer cannot inspect the goods/ give a right to return 
the article bought.' 

•. tTMrnLlOflL 

h. Benjamin on Sales, p. 74L 

1 See 181, n. Under most of the American decisions under a oon 
tract of Bale there is an implied warranty that the thing sold shaU oor 
respond to the description given. Hogina t. Plympton, 11 Pick. 97; 
Wlute ▼. MUler, 71 N. T. 118; Wolcott y. Mount, 86 N. J. L. 262; F<»v 
cheimer ▼. Stuart, 65 la. 698 {contra, Ryan ▼. Uimer, 108 Pa. St 882); 
Catchings ▼. ]3acke, 15 Mo. App. 51 ; CoegroTe v. Bennett, 82 Minn. 
341 ; Lampson t. Cummings, 62 Mich. 491. On the importance of the 
distinction between the terms warranty and condition, as applied to the 
description of the thing sold, see 2 Benjamin on Sales, g 966, note; West 
BepubUc Mining Ga y. Jones, 108 Pa. St. 65; Ryan y. Ulmer, id. 882. 

* By the later English decisions the right to rescind an executed con- 
tract of sale for breach of warranty is confined to cases of fraudulent 
warranty. This rule is foUowed in Voorhees ▼. Earl, 2 HiU, 288; MuUer 
y. Eno, 14 N. T. 597 ; Hooyer y. Sidener, 98 Ind. 290 ; Freyman y. Knecht» 
78 Pa. St. 141; Wright y. Dayenport, 44 Tex. 164; Buckingham y. Os- 
borne, 44 Conn. 188 ; and is said to be sustained by the weight of author!^. 
Bat in Massachusetts, Maine and Maryland it has been long established 
thftt the purchaser may rescind the contract and return the property, 
for breach of warranty, although there is no express agreement that 
be may do so and no fraud on the part of the yendor. Bryant y. 
bburgh, 18 Oray, 607 ; Marston y. E:mght, 29 Me. 841 ; Franklin y. Long, 
7 Gill & J. 407 ; and there is a growing disposition in American courts 
to foUow this nile. Bronson y. Turner, 77 Mo. 489 ; Johnson y. Whi^ 
man, 20 Mo. App. 102; Boothby y. Scales, 27 Wis. 626; Warder y. Fisher, 
18 Wis. 838; Ru£F y. Jarrett, 94 BL 475; Rogers y. Hanson, 86 la. 288; 
ByscB T. GbHttn. 26 Ohio St. 806w 



no DISCHABGE OF OONTRACT. BntT 

Bat it would seem that although the property has passed 
to the buyer, still if the article prove to be worthless and 
unmarketable, or different in character from that which he 
agreed to buy, he can exercise rights closely analogous with 
the right of return, and such as we have described as flow- 
ing from the discharge of contract by breach. 
[*301] *(1) He can defend an action successfully for the 
whole amount of the price. 

(2) He can, if he has paid the price, recover it back, as 
money received to his use, on the principle ' explained above, 
that where a man has done all or any part of his share of 
a contract which is afterwards broken by the default of the 
other party, he may recover as upon a distinct contract 
arising upon the acceptance by the other of money, goods, 
or services offered by him. 

In PauUon v. LaUimore^* the plaintiff sued the defendant 
for the price of seed ; the seed had been sold as new growing 
seed, but when sown it proved wholly unproductiva The 
defendant refused to pay anything for the seed, and his de- 
fence was successful to the whole amount of the price. 

In Young v. CciU^ the defendant employed the plaintiff as 
a stockbroker, and delivered to him some Guatemala bonds 
to sell. The plaintiff sold them and paid the price to the 
defendant The bonds turned out to be worthless because 
unstamped, and were returned to the plaintiff, who took 
them back, repaid to the purchaser their price, and sued the 
defendant for the amount which he had paid, as money re- 
ceived by the defendant for his use. 

The Court held that he was entitled to recover inasmuch 
as the purchaser of the bonds was entitled to return them 
and demand their price back from the broker, and the plaint- 
iff had thus been compelled to make the payment on behalf 
of the defendant. ^' It is not a question of warranty," said 
Tindal, 0. J., ^^ but whether the defendant has not delivered 



<k Ante, p. 937. 

«tfiii«.N.a.Tii 



HLgt. BY BBEAGH. 887 

■omeihiiig which, though resenMing the artide oontraoted to 
he oddj iaqfno valtieJ^ ^ 

It follows from what has been said that the buyer under 
the circumstances described may always maintain an action 
for damages sustained by the supply to him of an unmarket- 
able article, or of something different in character to that 
which he agreed to buy.* There needs no expressed term 
in the contract to enable him to do this. 

*It is somewhat unfortunate that the phrase ^ im- [*302] 
plied warranty '^ should have been used to describe 
terms of this nature. A non-compliance with such terms is, 
in fact, a breach of the entire contract, a substantial failure 
of consideration. If A agrees to buy beef of X, it seems 
hardly reasonable to say that X impliedly warrants that he 
will not supply mutton, or that he will not supply an article 
unfit for human food. 

The use of the term ** warranty ^ in this sense has been 
emphatically condemned by eminent judges,^ but it still ex- 



FT. n^tfbtd, n 0. B. H. a W; Modr ▼. Ongmm, L. R. 4 Bz. «, 
». Far Lofd Abisger, a B., Chantar ▼. HopkliM, 4 IL ft W. aW; Far 

AMBftT. OMaOa» L. K sa P. 0n. 

1 Day T. Pool, 62 N. Y. 410; Granshaw t. Slye, 53 Md. 140; Richard- 
floa T. Qrondj, 49 Vt. Sd; Ferguson t. Hosier, 58 Ind. 488; Vincent t. 
Lelaad, 100 Mass. 433 ; SooU t. Raymond, 81 Minn. 487. The New York 
role regarding the right to retain the goods and then sae for breach of 
warranty, where the goods had been accepted under an executory con- 
tract of sale, which has been regarded as unsettled, is definitely set forth 
in Brigg T. HUton, 99 N. Y. 539, by Danforth, J. "If the sale is of ex- 
isting and specific goods, with or without warranty of quality, the title 
at ODoe passes to the purchaser, and where there is an express warranty* 
it iB» if untrue, at once broken, and the vendor becomes liable in dam- 
ages, but the purchaser cannot for that reason either refuse to accept the 
goods or return them. If the contract is executory, and the goods yet 
to be manufactured, no title can pass untQ deliTcry or some equiTalent 
act to which both parties assent ; and when offered, the Tendee may re- 
ject the goods as not answering the bargain, but if the sale was with 
wanranty, he may receiTe the goods, and then the same consequences 
attaeh as in the former cases, and among others, the right to compenaa- 
tioQ if the wairan^ Is broken. See 3 Benjamin on Sales (4th Am. ed.) 



888 DISCHABOE OF OONTRACT. Ftet ▼. 

istSy and tends to obscure the subjeot of the performaaoe 
and breach of contract^ 

And this matter of total failure of consideration has been 
introduced, with not very happy results, into the subject of 
Mistake. As a rule a man makes a contract with an honest 
intention to keep his promise, and, if he fail to do so, fails 
from circumstances of which he was not aware, or npon 
which he did not calculate at the time he made it And the 
promisee in like manner expected with more or less reason 
that he would get what he bargained for * If both are 
wrong and the promise is broken by the supply of an article 
different in kind from what was contemplated, the rights of 
the promisee are not dependent on the mutual error of the 
parties, but on the somewhat elementary truth that a con- 
tract expressed in unequivocal terms gives a right of action 
to the party injured by its breach. 

In eases of divisible performance which wholly fails. — 

The rule further applies to the case of promises which we 
have described as capable of more or less complete perform- 
ance, and which may be broken in part without such breach 
affecting the existence of the contract 

Where the performance of a promise is divisible so that a 
pcvl::w breach will not discharge the other contracting party, 
«« x>tal failure of performance will nevertheless operate as a 
discharge.* And even where the failure is not total, there 
may well be a point at which its amount alters the 
^*303] character *of the transaction, and makes the tender 
of any further performance nugatory for the pur- 
poses which the contract was originally designed to effeot 

Thus in Ritchie v. Atkinson/ cited above, it was admitted 
that though the failure to deliver a oompleU cargo did nof 
exonerate the charterer, yet that if no cargo had been de 
livered he would have been discharged. 

a. FoUook, 08, 487, uid eaaet there cited. 
». PouMard ▼. Splen» 1 Q. & D. 410. 
& 10EMt,S». 

> See sate, 800» note. 



Ghi9-ni.lt. BY BREACH. 809 

And 80 with a promise which the parties regard as a sub- 
sidiary term in the contract in so far as its exact perform* 
ance is not a condition upon which the rights of the promisor 
dc^pend: if it be broken in such a way as to frustrate the 
objects of the contract, it operates as a condition and the 
breach of it as a discharge. 

So in the case of a charter-party, ^^ not arriving with due 
diligence or at a day named is the subject of a cross-action 
only. But not arriving in time for the voyage contemplated^ 
but at such a time that it is/rustratedy is not only a breach qf 
eantraot but discharges the charterer.^ * 

Conditions Precedent. 

In the oases with "^hich we have been dealing, one of the 
parties to a contract has been excused from performance of 
his promise by reason of the entire failure of the considera. 
tion which was to have been given for it We now come 
to Conditions Precedent in the narrower and more frequent 
use of the word, as meaning a single term in the contract, 
but a term possessing a particular character. 

Condition Precedent defined. — We will define a Condi- 
tion Precedent, in this sense, as a Statement or Promise, the 
untruth or non-performance of which discharges the con- 
tract. 

The difScuIty which has always arisen, and must needs 
continue to arise with regard to Conditions Precedent, con- 
sists in discovering whether or no the parties to a contract 
regarded a particular term as essential. If they did, the 
term is a Condition: its failure discharges the contract^ If 

a. JicHoB ▼. UnkMi ICarine In. Oo. L. R. 10 O. P. p. ItfL 

1 Breach of eondition precedent— It is weU settled that the breach 
of a condition precedent wUl discharge a contract, unless performance 
of the condition is waived or rendered impossible by the act of Ood, the 
law or the other party. Dermott t. Jones, 3 WaU. 1 ; Button t. RosseU 

66 Kioh. 478; BeU y. Hoffman, 02 N. a 878; Kirkpatrick t. Alexander, 
60 Ind. 96; Rogers t. Sheerer, 77 Me. 828; Harder t. Harion Oa Com. 

67 Ind. 466; NewhaU t. Clark, 8 Ciuh. 876; Hualed t. GM& 86 N. Y. 
881. See omU^ 888, notai 



400 DIBGHABaS OF CONTBAOE. Fvt W. 

they did not, the term is a Wamntj: its failnie oaa 
[*304] only *giTe rise to an action for such damages as 
have been sustained by the failure of that partioolar 
term. 

Warranty and Condition are alike parts, and only parts, 
of a contract consisting in varions terms. We have tried 
to define Condition, we will yentnre further to try and de- 
fine Warranty. 

Warranty defined.— Warranty is a more or less unqoat 
ified promise of indemnity against a &ilnre in the perform- 
ance of a term in the contract 
It is right to say that the word warranty is used in the 
most confusing manner, and in a great variety of 
[•805] senses,* but *itis submitted that the definition which 
has just been given assigns to the term its primary 

m. n wobM be > wotkof gome wBaroh to gnnmamte the rmrlam rnmmm Ja wliioh ihm 
wd mrronff to ueed. Tbe foUowiog ate ■cmie of the onminimer mm of the term:— 

d) Wamntj !■ need ee equlTeleiit to a oonditlonpreoedeBt in the eaiioe oCa deocri^ 
life eteteiBeiit on the tenth oCwUoh the rfl^tioC one oCibipeitieidepeBdL Beha ▼. 

CD It ie nwd ee equfreleot to a ooBdftkm preoedent hi the enM e( a ppomtae vWi tte 
iffeol above deeeribed. Beha ▼. Bomeaa 

CI) It ia nwd as meaiilef a oondltkm the treaoh o< which haa beea aeooieMMd te» eai 
wtakhthefetaeformaaeanaeof aottoabotdoea Boteraato a dlaoharieL Beha ▼. 



(4)Iti8ii8edaaaBhide|MndeBtaiiboidlai7praBlaa,eollataral tothe maladbjeet e( 
fheooatraot Ohaiiter ▼. Hf^klna. Ikla. tt te ■nhmttted, la tti kctttmato iiMaiita«. 4 
U.AW.40L 

(8) la relatloatotheeoiitraetoCBale, wanrnnlyiBiiaedfloraB ei.|ii eai pranlae that 
an artiole ahall anawer a paitioular itaiidanl of qoall^; and thia promln la a eoad$> 
tfoaimtfltlMaaleia eKeouted,awaRa&^attarttiB asaeutod. Steeet v. Blaj, ft a a 
Ad. 461 

(9 JiRpMad iBarran<iriaatenniiaedvef7oft8B in anQh a anaa aato amovml to a 
repetition bj impUoation of the e x p re ai mdartaktog of ooe of the oootraeting partlea. 
We have mentioned tbe implied wamntj in an OKMUtorj oontraet of aale that gooda 
■hall anawer to their fpeoifle deocriptlon and be of a matnhantahie quality; tai other 
worda, that there ahall be a ■nbatantial performance of the oontgact, JoneoT. Jua^ 
L. K 8 Q. & m ; ante. p. aoi. 

Implied warrant of title appean to be a ao m ewhat teied qoaaUi 
opinion aeema to be that on the aale of an aitlole a man ia aoppooed to 1 
bahaaarfl^ttoBeUit;lnotberwordB,**thatba aalli a ohaltol and not a tee 
BloholaT. Banniater, 17 a & N. a 706w 

Bnt the atrangeotappUoaliona of the implied wartanlr are the wmnwUif ^ mmihtm^ 
My whieh a man la aappoaed to give to a penon oontoaeUnc vHh him aa ■iiaii, uf 
wbioh BMre hereafter; and the mrmiify o/ poMiMWy whk^ a man ia aakl to give, if 
be omlfti to intradaee hito hia promtoe oondiUona whk^ ffoaid hhn ttam batov benna 
byainiaaeientof Hi beeomHf impoarible of pariormanaa Orita ▼. Wh^M^ 7 K 

ft a aois •& a a MT: omoovAt. watiii UB. fa p.avf. 



Gkap. m. 8 S. BY BBEAGH. 401 

meaning. ^'A warranty is an express or implied state- 
ment of something whioh the party undertakes shall be part 
of the contract; and though part of the contract, collateral 
to the express object of it."* The breach of a term which 
amounts to a warranty will give a right of action, though 
it will not take away existing liabilities; it is a mere prom* 
ise to indemnify. 

We have called a warranty ^^ a more or less unqualified 
promise ; " and we will illustrate the meaning of this phrase 
from the contract between a Bail way Company and its pas- 
sengers. It is sometimes said that a Bail way Company as 
% oommon carrier warrants the safety of a passenger's lug- 
gage, but does not warrant lus punctual arrival at his des- 
tination in accordance with its time tables. In truth it 
warrants the one just as much as it warrants the other. In 
each case it makes a promise subsidiary to the entire con- 
tract, but in the case of the luggage its promise is qualified 
only by the excepted risks incident to the contract of a 
common carrier; * in the case of the time table its promise 
amounts to no more than an undertaking to use reasonable 
diligence to ensure punctuality. A promise is not more or 
less of a warranty because a greater or less degree of dili- 
gence is exacted or undertaken in the performance of it.* 

That the promises are warranties and not conditions is 
apparent from the fact that neither loss of luggage nor un- 
ponctnality would entitle the passenger to rescind the con- 
tract and recover back his fare.^ 

m. FteLofd Alibiger.a a, in Ohaiitdr ▼. HopUna, 4M. ft W. 401 
h. BIchArds t. London, Brighton ft S. a RaUwaj Oo. 7 0. a 88a. 
ii La Blanche t. L. ft N. W. BftUway Oo. 1 C. P. D. 811. 

1 Warranty. — The author seeks to impress upon the reader the im- 
portance of a correct use of the terms warranty and condition. While 
the legitimate meaning of the term warranty may be " an independent 
Buhsidiary promise, collateral to the main object of the contract,** siiU, 
under the dedaions, it la either independent or conditional, according to 
the intention of the parties expressed in the contract As iUustrative of 
the w»<M»w*r in which these words are used interchangeably, we may 
qooie fram the opinion of Justice Gray in Norrington t. Wright, 115 U. 
M 



409 inSCHABaE OF OONTRAOI. Fui % 

Dlffleulttofl of dtstlngutshtng eondltlon and warranty. — 

The qaestion whether a partioular term in a contract is a 
Condition Precedent or a Warranty is one which, as it turns 
npon the construction of each individual contract, need not 
detain us longer here. 

" The rule has been established," said Tindal, 0. J^ in 
Staveri v. Curling^ '* by a long series of decisions in modem 
times, that the question whether covenants are to bo held 
dependent or independent of each other, is to be 
[*306] determined *by the intention and meaning of the 
parties as it appears on the instrument, and by the 
application of common sense to each particular case; to 
which intention when once discovered all technical forms 
of expression must give way." 

And Blackburn, J., puts the matter in the same light in 
the recent case of BeUini v. Oye: * — 

*^ Parties may think some matter, apparently of very litUe 
importance, essential; and if they sufficiently express an 
intention to make the literal fulfillment of such a thing a 
condition precedent, it will be one; or they may think that 
the performance of some matter, apparently of essential 
importance and prima fade a condition precedent, is not 
really vital, and may be compensated for in damages, and if 
they sufficiently expressed such an intention, it will not be 
a condition precedent" 

This being the rule as to the ascertainment of a conditior 

a. S Bluff. N. 0. 8BS. 
k 1Q.B.D.1S7. 



8» 308. ** A statement descriptive of the subject-matter, or of i 
terial incident, such as the time or place of sliipment, is ordinarilj to u 
regarded as a warranty, in the sense in which that term is used in in^cr 
ance and maritime law, that is to say, a condition precedent, upon th/ 
failure or non-performance of which the party aggrieved may repodiai^ 
the whole contract. See, also, Davison y. Van Ungen, 118 U. ^ 40 
Again: Under the English law in a contract of sale, words of desci iptu>r 
import a condition and not a warranty, whereas the American noui^i 
feneraUy treat the description as a warranty that the property yiji4 s >^ 
that deeoription. See 3 Benjamin on Sales (4th Anu ed.), $ QSk^ 



Chmp. m. § 2. BY BREACH. 403 

precedent, it will be enough to note that a condition prec- 
edent may assame the form either of a statement or of a 
promise. In speaking of Misrepresentation,* we pointed 
out the mode in which statements forming the basis of a 
contract or regarded as essential to it were incorporated 
into the body of the contract, and were placed npon a level 
with promises the breach of which would confer a right of 
action, and in certain cases effect a discharge. 

Acqnleseenee In a breach of condition turns It Into a 
warranty. — But it must be borne in mind that a condition 
precedent may change its character in the course of the 
performance of a contract; and that a breach which would 
have effected a discharge if treated as such at once by the 
promisee, ceases to be such if he goes ou with the contract 
and takes a benefit under it 

This aspect of a condition precedent is pointed out by 
Williams, J., in Bekn v. BumesSy* where he speaks of the 
right of the promisee, in the case of a broken condition, to 
repudiate the contract, ^' provided it has not already been 
partially executed in his favour; " and goes on to say 
that if *after breach the promisee continues to ao- [*307] 
cept performance, the condition loses its effect as 
such, and becomes a warranty in the sense that it can only 
be used as a means of recovering damages. 

An illustration of such a change in the effect of a condi- 
tion is afforded by the case of Ptist v. Donne,* The de- 
fendant chartered the plaintiff's vessel for a voyage to 
Sydney, he promised to pay £1,550 in full for this use of 
the vessel on condition of her taking a cargo of not less 
than 1,000 tons weight and measurement. The charterer 
had the use of the vessel as agreed upon; but it appeared 
that she was not capable of holding so large a cargo as 
bad been made a condition of the contract To an action 
brought for non-payment of the freight the defendant 

a. ABto, p, 147. 



104 DISGHABOB OF OONTRAGI. PtotY 

pleaded a breach of this oonditioiL The term in the oon- 
tract which has been described was held to have amoanted, 
in its inception, to a condition. ^^It is not easy to see," 
laid Blackburn, J., ^^ what is meant by these latter words 
onless they import a condition in some sense; and if when 
the matter was sttU exe^utaryy the charterer had refused to 
put any goods on board, on the ground that the vessel was 
not of the capacity for which he had stipulated, / will not 
say that he might not have been justified in repudiating the 
contract altogether; and in that case the condition would 
have been a condition precedent in the full sense." 

He then quotes with approval the dicta of Williams, J., 
in Behn v. BumesSj* and goes on to say, ^^No doubt that 
principle is adopted from the judgment of Lord Wensley- 
dale, in Chrwces v. Legg^ and this distinction will explain 
many of the cases in which, although there appears to have 
been a condition precedent not performed, a party having 
received part of the consideration has been driven to his 
cross-action.^ Now is not this a case in which a substantial 
part of the consideration has been received? And to say 
that the failure of a single ton (which would be enough to 
support the plea) is to prevent the defendant from 
[*S08] being compelled to pay ^anything at all, would be 
deciding contrary, to the exception put in the case 
of Behn V. Bumess.^* 

Bnt not if the breach be of a substantial character.— 
But the part performance thus accepted after breach most 
be ^'a substantial part of the consideration ^ or the oondi 
tion does not lose its force. 

In EUen v. Tojp^f the father of an apprentice was sued 

«. • Szoh. 70Q, ante, p. 01 
k 6Exoh.4M. 

1 There is no question but that a oondition precedent may be warred 
and the promisee be required to pay for saoh benefits as he maj ha^e 
reoeiTed under the contract, less the damage sustained by the promisor^ 
default; but the American authorities do not agree on the propositioa 
that a party haying received a part of the consideration is diiv«n to 
Us oroas-aotton. See oases cited g SH nota 



nLSa. BTBBEACH. 401 

npon an apprenticeship deed to which he was a party, by 
the master, for a discontinnance of service by his son. The 
boy had served for three years out of a term of five. The 
father pleaded that the master, having agreed to teach 
the apprentice three trades, had abandoned one of them. 
It was argued that as the plaintiff had given so much of 
the consideration as a three years' instruction, the condi* 
tion that he should practice the three trades which he had 
originally promised to teach, had Cjeased to be a condition 
precedent and that the apprentice was not discharged by 
the breach. The Court admitted that ^^ the construction of 
an instrument may be varied by matter eso past facto; and 
that which is a condition precedent when the' deed is exe- 
cuted may cease to be so by the subsequent conduct of the 
covenantee in accepting less." But it was held that the 
failure, although some performance had since been accepted, 
was a failure to fulfill a substantial part of the considera- 
tion, that the covenant to teach was a continuing condition 
precedent to the covenant to serve, and that^ in conse- 
quencOi the rule under discussion did not apply. 

§ 8. Remedies for Breach of ContraoL 

Remedies for breach. — Having endeavoured to ascertain 
the rules which govern the discharge of contract by breach, 
it remains to consider the remedies which are open to the 
person injured by the breach. 

If the contract be discharged by the breach, the person 
injured acquires or may acquire, as we have seen, three 
distinct rights: (1) a right to be exonerated from further 
performance; (2) a right, if he has done anything under the 
contract, to sue upon a quantum m^ruity a cause of action 
distinct from that arising out of the original con- 
tract, and *based upon a new contract originating [*309] 
iu the conduct of the parties; (3) a right of action 
apon the contract, or term of the contract broken. 

Damages and speclflc performance. — But we are now 
no longer specially concerned with that breach of oontraot 



406 DISCHAEOE OF CONTRACT. PutT. 

which amounts to a discharge: we may therefore consider 
generally what are the remedies open to a person who is 
injured by the breach of a contract made with hiuL They 
are of two kinds: he may seek to obtain damages for the 
loss he has sustained ; or he may seek to obtain specific per- 
formance of the contract which the other party has refused 
or neglected to perform. 

But there is this difference between the two remedies: 
every breach of contract entitles the injured party to dam^ 
ageSy though they be but nominal; but it is only in the case 
of certain contracts and under certain circumstances that 
ipecifie performance can be obtained. 

We do not propose to treat of these remedies otherwise 
than m the most general way, for the matter is one which 
barely comes within the scope of this work: but it may be 
well to state briefly some elementary rules which govern 
the two remedies in question. 

Damages. 

When a contract is broken and action is brought upon 
it, — the damages being unliquidated, that is to say unas- 
certained in the terms of the contract, — how are we to ar- 
rive at the amount which the plaintiff, if successful, is 
entitled to recover? 

(1) Damages should represent loss snstained. — ^^The 
rule of the Common Law is,* that where a party sustains a 
loss by reason of a breach of contract, he is, so far as 
money can do it, to be placed in the same situation, with 
respect to damages, as if the contract had been performed.'' ' 

m» F6r Pftrk», B., Robinson t. Hftrman, 1 Ex. 8B& 

1 Allison T. Chandler, 11 Mich. 552. "The principle of compenBatioD 
for the loss or injury sustained, is, we think, that which lies at the basis 
of the whole question of damages in most actions at common law, whether 
of contract or tort** Griffin y. Colver, 16 N. T. 494; Noble v. Ames 
Kanuf. Ca 112 Mass. 497; Croucher v. Oakman, 8 Allen, 185; TufU t. 
Plymouth Qold Mining Ca 14 Allen, 407; Buckley ▼. Buckley, IM Not. 
488. 



Cahi^ m. 8 1 ' BY BREACH. 407 

Thus where no loss accrues from the breach of contract, 
the plaintiff is nevertheless entitled to a verdict, but for 
nominal damages only, and ''nominal damages, in fact, 
mean a sum of money that may be spoken of, but that has 
no existence in point of quantity." * And so in ac- 
tion for the *non-payment of a debt, where there is [*310] 
no promise to pay interest upon the debt, nothing 
more than the sum due can be recovered; for the possible 
loss arising to the creditor from being kept out of his 
money is not allowed to enter into the consideration of the 
jury in assessing damages, unless it was expressly stated at 
the time of the loan to be within the contemplation of the 
parties.* But by 3 & 4 Will. IV. c. 42, § 28, a jury may al- 
low interest at the current rate by way of damages, in all 
oases where a debt or sum certain was payable by virtue of 
a written instrument, or if not so payable was demanded 
in writing with notice that interest would be claimed from 
the date of the demand. 

(2) So far as It was in contemplation of the parties. — 
The rule laid down by Parke, B., in Robinson v. Ilai^ma/n 
must be taken subject to considerable limitations in practice. 
The breach of a contract may result in losses which neither 
party contemplated, or could contemplate at the time that 
the contract was entered into, and the Courts have striven 
to lay down rules by which the limit of damages may be 
ascertained. 

The damages to which the plaintiff is entitled are such as 
might have been supposed by the parties to be the natural 

m. Far Manle, X, Id Beaumont t. Oreathead, » C. B. 4M. 

1 " Where the obligation to pay money, however, is special, and haf 
referenoe to other objects than the mere discharge of a debt, as where 
it is agreed to be done to facilitate trade, and to maintain the credit of 
the promisee in a foreign country; to take up commercial paper; pay 
taxes; discharge liens; relieve sureties; or for any other supposable 
ulterior- object, damages beyond interest for delay of payment accord- 
ing to the actual injury may be recovered.** 1 Sutherland on Damages, 
laS^ oiting English authoritiea. See Prehn v. Royal Bank of Livorpool, 
L.B.SXZ.M. 



406 DI8GHABOE OF OONTBACT. FvtV 

remit of a breach of the contract;* snoh as might hare 
been in their contemplation when the contract was made.' 

«. Bftdl^ ▼. BiTWHiato, • Exeh. 8B6; Greberi Botxnli t. Hufeiit; 16Q. IL D. 8BL 

^ Hadle J T. Baxendftle, dted by the author, is a leadinif: caae and is 
ganerally followed in this country. Plaintiffs, the owners of a floor 
mill, brought suit against a common carrier to recover damages for Vm 
■ustained bj reason of defendant's unreasonable delay in the shipment 
of a shaft, whereby plaintiffs were unable to work their mill for want of 
the shaft and incurred a loss of profits. The following rules were an- 
nounced by the court, Alderson, B., deliTering the opinion: " Where 
two parties have made a contract which one of them has broken, the 
damages which the other party ought to receiTe in respect of such breadi 
of contract should be (1) such as may fairly and reasonably be considered 
either arising naturally, i. e. according to the usual course of thingSi 
from such breach of contract itself ; (2) or such as may reasonably be sup- 
posed to have been in the contemplation of both parties, at the time thej 
made the contract, as the probable result of the Inneach of it.** (8) And 
if the danoages arose out of the special circumstances under which the 
contract was made, and such circumstances were communicated by the 
plaintiff to the defendant, " the damages resulting from the breach of 
such a contract, which the parties would reasonably contemplate would 
be the amount of injury which would ordinarily follow from a breach 
of a contract under these special drcumstances so known and communi- 
cated." (4) " But on the other hand, if these special circumstances wers 
wholly unknown to the party breaking the contract, he, at the most, 
could only be supposed to haye had in his contemplation the amount of 
injury which would arise generaUy, and in the great multitude of cases 
not affected by any special circumstances so known and conununicated." 
Under these rules defendant had judgment. This case has been cited ap- 
provingly by nearly every American court See Shouse v. Neiswaanger, 
to Ma App. 246 ; Hammer v. Schoeof elder, 47 Wis. 459 ; Shepard ▼. ^S^ 
waukee, eta 16 Wis. 818; Blinois Central R. R. Ca v. Ck)bb, 64 DL 128; 
Fleming v. Beck, 48 Pa. St 812; True v. International Teh Ca <M> Ma 
26; Culling v. Grand Tnink R. R Ca 18 Allen,885; Hurd v. Densmoie, 
68 N. H. 171; Buffalo Barb Wire Ca v. Phillips, 64 Wis. 888; H. & T. 
C R'y Co. V. Hill, 68 Tex. 885. Many judges, in commenting on the 
third rule in Hadley v. Bazendale, have held " that a bare natioe of 
special consequences which might result from a breach of the contract, 
unless under such circumstances as to imply that it formed the basis of 
the agreement, would not be sufficient" Booth v. Spuyten Duy vil BoU- 
faig Mill Ca 60 N. Y. 424; SneU v. Cottingham, 72 Bl. 161; Bri<l^ ▼ 
Blidkney, 88 Ma. 869; Friend V. Miller, 67 CaL 464; McEannonv. MoEwaSp 
48 Mich. 106; Osborne v. Poket, 88 Minn, la 



Ctm^ m. 8 1 BT BREACH. 40li 

JBeotptiorud Um should he matter of epeoial terms. — Any 
special loss which might accrue to the plaintifF, but which 
would not naturally and obviously flow from the breach, 
must, if it is to be recovered, be matter of express terms in 
the making of the contract. 

In Same v. Midland Railway Company^ the plaintiff 
being under contract to deliver shoes in London at an un- 
usually high price by a particular day, delivered them to 
the defendants to be carried, with notice of the contract 
only as to the date of delivery. The shoes were delayed 
in carriage, were consequently rejected by the intending 
purchasers, and the plaintiff sought to recover, besides the 
ordinary loss for delay, the difference between the 
price at which the shoes were ^actually sold and that [*S11] 
at which they would have been sold if they had 
been punctually carried. It was held that these damages 
were not recoverable, in the absence of any evidence that 
the Company undertook to be liable for the exceptional loss 
which the plaintiffs suffered from an unpunctual delivery. 

(8) Damages for breach of contract not vindictive. — 
Damages in an action for breach of contract are by way 
of compensation and not of punishment. Hence a plaint- 
iff can never recover more than such pecuniary loss as he 
has sustained, subject to the above rules. To this general 
mle, however, the breach of promise of marriage is an ex- 
ception, for in such cases the feelings of the person injured 
are taken into account, apart from * such specific pecuniary 
loss as can be shown to have arisen.^ 

(4) Assessment by parties.— The parties to a contract 
not nnfrequently assess the damages at which they rate a 
breach of the contract by one or both of them, and intro> 
dnoe their assessment into the terms of the contract Under 

«. Far BtaokbarB, J., in Hone t. Midlaiid Raflwsy Co. L. & 8 a P. ItL - 
kBuBllBT.OraAtMoctlMniBAdwajCal H. AM. 4061 



1 Sedgwick on Damages, 487: Duche t. Wilson, 87 Hun (N. Y.X 619; 
Field on Damages, 110; Johnson t. Trayis, 88 Minn. 281; Gait t. Wal- 
laoi^tAN. J.USSl; Thorn t. Kn^p^ 48 N. Y. 474. 



410 DISCHABOB OF CONTBACT. Ftot Y. 

these oircamstance arises the distinction between penalty 
and liquidated damages, whioh we have already dealt with 
in oonsidering the oonstraction of contracts. 

(5) DIfBculty.of assessment mast be met by jary. — It 
follows from the general rule laid down by Baron Parke,* 
that a difflcalty in assessing damages can in no way disen- 
title a plaintiff from having an attempt made to assess them. 
A manufacturer was in the habit of sendmg specimens of 
his goods for exhibition to agricultural shows, and he made 
a profit by the practice. He entrusted some such goods to 
a railway company, who promised the plaintiff, under cir- 
cumstances which should have brought his object to their 
notice, to deliver the goods at a certain town on a fixed day. 
The goods were not delivered at the time fixed, and conse- 
quently were late for a show at which they would have 
been exhibited. It was held that though the ascertainment 
of damages was difScult and speculative, its difficulty was 

no reason for not giving any damages at alL* . 
[*312] *And further, the plaintiff is entitled to recover 

for prospective loss arising from a refusal by the 
defendant to perform a contract by which the plaintiff 
would have profited.' Thus where a contract was made for 

a. RobiBflon t. Earman, 1 Ex. 86S. 

k Simpson ▼. L. A N. W. Railwar Co. IQ. B. D. fTi. 

1 ProspectiTe proflts which would have been realized but for the 
defendant's fault are reooverable. Those which are speculatiye or con- 
tingent are not. They must be proved with sufficient certainty and not 
be left to conjecture. Griffin ▼. Colver, 16 N. T. 489; United States t. 
Behan, 110 U. 8. 838; Hubbard v. Russel, 51 Conn. 428; Sterling Organ 
Co. T. House, 25 W. Va. 64; Rice t. Candle, 71 Ga. 605; FairchUd t. 
Rogers, 82 Minn. 269; White ▼. Miller, 71 N. Y. 118; Hay v. Qronoble, 
84 Pa. St 9; Dennis y. Maxfield, 10 Allen, 188; Masterton v. Mayer, 7 
Hill, 61; Goodrich t. Hubbard, 61 Mich. 62. The rule that merely 
speculatiye profits are not allowed is unquestioned, but there is some 
difficulty in determining what degree of certainty is required. In a re- 
markable case recently decided in New York, it was held that the rule 
that damages which are contingent and uncertain cannot be recoyered 
embraces only such as are not the certain result of the breach, not such 
m are the certain result, but onoertain in amount; and that prospective 



Chap. m. § 8. BT BREACH. 411 

tne snpply of coal oy the defendants to the plaintiff bj 
monthly instalments, and breach occnrred and action was 
brought before the last instalment fell due, it was held that 
the damages must be calculated to be the difference between 
the contract price and the market price at the date when 
each instalment should have been delivered, and that the 
loss arising from the non-delivery of the last instalment 
must be calculated upon that basis, although the time for 
its delivery had not arrived.* 

Specifio Perfarmanos. 

Jurisdiction of Chancery^ as to speci^c performance. — 

The jurisdiction, once exclusively possessed by the Court of 
Ohancery, to compel performance of a promise, supple- 
mented the remedy offered by the Common Law Courts, 
which was often inadequate or inapplicable to the loss sus- 
tained. 

A promise to do a thing can be enforced by a decree for 
specifio performance; a promise to forbear by an injunc- 
tion. 

m. Boper ▼. Johnson, L. & 8a P. 147. 

profits are aUowable, as damages, although the amount is uncertain; 
that with the facts and circumstances proved, before them, the jury 
win '' approach as near the proper measure of justice as the nature <tf 
the case and the infirmity which attaches to the administration of the 
law wiU admit.** Wakeman t. Wheeler & Wilson Mannf . Co. 101 N. T. 
205 (1886). This decision is at variance with many cases, and lays down 
a role in some respects quite unsatisfactory. Howe Machine Co. t. 
Bryson, 44 la. 169; Brigham &Oo. t. Carlisle, 78 Ala. 248; Union Refin- 
ing Ca T. Barton, 77 Ala. 148; Lewis t. Atlas Mutual Ins. Go. 61 Md 
584; .Atna Life Ins. Go. y. Noxson, 84 Ind. 847; Allis t. McLean, 48 
Mick 488. In Brigham t. Carlisle (supra), CAopton, J., said : ** Profits 
are not excluded from reoorery because they are profits; but when ex- 
daded it is on the ground that there are no criteria by which to esti- 
mate the amount with the certainty on which the adjudications of 
ooorti and the findings of the juries should be based. The amount is 
not rasoeptible of proof.** See 8 Sutherland on Damages, lOT; Jones t 
Kathrop, 7 CV)L 1; MiUer t. Jannett, 68 Tex. 87; H. A; T. C. B*y Ck>. y 
HiU,68Tex.887. 



41t DISCHABOB OF OONTBACT. Ftet T 

How Umttad. — The ezeroise of this jarisdiction by the 
Oonrt of Ohanoerj was limited by Bereral roleB, some of 
which have been already noticed. Defects in the forma- 
tion of a contract * afforded an answer to a claim for specific 
performance, and in some cases Equity was more goarded 
than the Common Law in granting its remedy to suitors. 
The remedy was refused to a gratuitous promise though 
made under seal; nor can an infant obtain specific perform- 
ance of a contract which cannot be enforced against him.* 

Speaking generally on a subject which it is impossible to 
deal with here in detail, one may say that the substantial 
limitations on the employment of the remedy were these. 

The Courts will not decree specific performance — 

1. Where the Common Law remedy of damages is ade- 
quate to the loss sustained. 

a. Where the matter of the contract is such that the 
Courts cannot supervise its execution. 
[*818] *(1) 8pecifle performance only where damage aa 
inadequate remedy. — The first of these rules is 
illustrated by the different attitude which the Court has as- 
sumed in this matter towards contracts for the sale of land 
and contracts for the sale of goods. 

The objects with which a man purchases a particular 
piece of land are different to those with which he pur- 
chases goods. He may be determined, in making the con- 
tract, by the merits of the site or its neighborhood, and 
these cannot be represented by a money compensation; 
whereas goods of the kind and quality that he wants are 
generally to be purchased. Hence specific performance of 
a contract for the sale of goods is only decreed in the case 
of specific chattels the value of which, either from their 
beauty, the interest attaching to them, or some other cause^ 
cannot be represented by damages.* 



k K^towloh ▼. lUaniBt, 1 D. M. ft a. m; FUsht ▼. Bolkuid. 4 Bhu ML 



CtK^ m. § Ii BY BBEAGH. ilt 

(2) And where the Coart fan insure performance. — And 

the distinction drawn between land and goods illostrates 
the second role also. 

An agreement for the purchase of land can be performed 
by the doing of a specific act, the execution of a deed or 
conveyance. In a contract for the sale and delivery of 
goods performance may extend over some time and involve 
the fulfillment of various terms, and "The Court acts only 
where it can perform the very thing in the terms specifically 
agreed upon."* 

But the second rule is more distinctly illustrated by the 
refusal of the Courts to grant specific performance of con- 
tracts involving personal services; though it will enforce by 
injunction a promise not to act in a particular way. 

Thus in Lumley^ v. Wagner y^ the defendant agreed with 
the plaintiff to sing at his theatre upon certain tenns, and 
during a certain period to sing nowhere else. Subsequently 
she entered into an engagement with another person to sing 
at another theatre, and refused to perform her contract 
with the plaintiff. 

m» Sm Fw Lord Salbonie, Wol^erfaampUm Baflwaj Co. ▼. I^ A H. W. Bailwaj 0» 
L. R. 16 Eq. Ati>. 489; Qenru ▼. Edwards, a Dr. ft War. 80. 
ft. 1 D. M. ft O. 601 

^Lamley t. Warner.— In Sanquirioo ▼. Benedetti* 1 Barh. 816, Um 
oooit declined to restrain the defendant bj injunction from the breach 
of an agreement not to make engagements with persons other than 
plaintiff to perform and sing in concerts, operas, etc., thrpughoat the 
United States and Canada. Under the earlj equity rule a court of 
•quitj would not restrain the yiolation of the negative part of an agree- 
mient when it could not enforce the affirmative stipulations. In such a 
case the party was left to his remedy at law. Kemble v. Kean, 6 Sim. 
R. 838; Hamblin v. Dunneford, 2 Ed. 625; Burton v. Marshall, 4 QiU 
(lid.), 487. Later decisions have overthrown this doctrine, and Lumley 
▼ Wagner is generally followed* The relief may be granted though 
the negative promise is not express, but implied from the oontraot. 
Daly V. Smith, 88 N. T. Superior Ct 168 (1874); McCall v. Braham, 16 
Fed. R. 87; Chicago & A. R'y Ca v. New York, L. E. & W. R. Ca 84 
Fed. R. 621 ; Port Clinton R. Ca v. Qeveland & T. B. Ca 18 Ohio St 
660; Marble Ca v. Ripley, 10 WalL 86a But see Woolensack v. Brigfi, 
miiiols Supreme Court, 86 Albany Law J. 448, 



414 DISCHAROB OF OONTRACT. PutT 

The Coart declined to enforce so much of the contract as 
related to the promise to sing at the plaintiff's 
l*Zli] theatre, but *it restrained the defendant bjr injunc- 
tion from singing elsewhere. 

The remedy has been extended to breach of contract for 
the sale of specific goods by the Mercantile Law Amend- 
ment Act* 

Effect of Jadieatare Acts. — And specific performance 
may now be granted by any one of the Divisions of the 
High Court of Justice; for the Judicature* Act has re- 
moved the old distinctions of jurisdiction between the Com- 
mon Law and Chancery Courts. There is however assigned 
to the Chancery Division/ as a special department of its 
business, suits for ^^ specific performance of contracts be- 
tween vendors and purchasers of real estate, including con- 
tracts for leases." 

§ 4. DUcharge qf Right of Action arising from Breach qf 

Contract. 

Discharge of right of action. — The right of action aris- 
ing from a breach of contract can only be discharged in 
one of three ways: — 

(a) By the consent of the parties. 

(f) By the judgment of a Court of competent jorisdio- 
tion. 

(c) By lapse of time. 

(a) Discharge ly consent of the parties. 

By release. — This may take place either by Release or 
by Accord and Satisfaction; and the distinction between 
these two modes of discharge brings us back to the element- 
ary rule of contract, that a promise made without Consid- 
eration must, in order to be binding, be made under seal 
A Release is a waiver, by the person entitled, of a right of 

m, 19ft » viola 97, |& 

k aefttr vioio.M.|flft,mHT. 

c|84.iab-|I. 



Chap. HL § i. BT BKEAGH. 41ft 

action accraing to him from a breach of a promise made to 
him. 

In order that such a waiver should bind the person mak- 
ing it, it is necessary that it should be made under seal; 
otherwise it would be nothing more than a promise, given 
without consideration^ to forbear from the exercise of a 
right. 

To this rule bills of exchange and promissory notes 
form *an exception. We have already seen that [*315] 
these instruments admit of a parol waiver before 
they fall due. It appears to be correct to say that the 
right of action arising upon a bill or note can be discharged 
by express,* though gratuitous, renunciation.* 

By Accord and Satisfaction. — Accord and Satisfaction 
is an agreement, which need not be by deed, the effect of 
which is to discharge the right of action possessed by one of 
the parties to the agreement. But in order to have this ef- 
fect it is not merely necessary that there should be consid- 
eration for the promise of the party entitled to sue, but that 
the consideration should be executed in his favour. Other- 
wise the agreement is an accord without a acUisfaction} 
The promisor must have obtained what he bargained for in 
lieu of his right of action, and he must, have obtained some- 
thing more than a mere fresh arrangement as to the pay- 
ment or discharge of the existing liability.' 

The stUisfaction may consist in the acquisition of a new 
right against the debtor, as the receipt from him of a negoti- 
able instrument in lieu of payment ; ' or of new rights against 

m. ▲Bta.p.900; BjIm on Bfli*. IS Ed. 198. 

b, Baylej ▼. Honuw, I Biag. N. O at p. 900; McManufl ▼. Bark, L. a I Bzeh. «w 

1 Ante, p. 200, note. 

s Kromer ▼. Heim, 76 N. Y. 674 ; Johnson ▼. Hunt, Sl Ej. 821 ; Schlits 
T. Ifejer, 61 Wis. 418; Brennan ▼. Ostrander, 60 N. Y. Super. Ct 426; 
Hemmingway ▼. Stansell, 106 U. a 899; Ogilvie v. Hallam, 68 la. 714; 
Lankton ▼. Stewart, 27 Minn. 346; Simmons v. Hamilton, 66 CaL 498; 
Browning ▼. Grouse, 43 Mich. 489; Pettis ▼. Raj, 12 R. L 344. 

> 8m ante, 273 n.; Varney ▼. Ck>ner7, 77 Me. 627; Bennett ▼. Hill, 14 
a L 8S2; Mason ▼. CampbeU, 27 Minn. 64; GuUd ▼. Butler, 1S7 
8S1 



Ue DISCHABGB OF OOlfrBACTI. Flut ▼• 

the debtor and third parties, as in the case of a composition 
with creditors;* or of something different in kind to that 
which the debtor was boand by the original contract to 
perform ; bnt it must have been taken by the creditor as 
$atisf action for his claim in order to operate as a valid 
discharge. 

Qf) Discharge ly the judgment of a Court qfeompeteni 
jtmadtction. 

The judgment of a court of competent jurisdiction in the 
plaintiff's favour discharges the right of action arising from 
breach of contract The right is thereby merged in the 
more solemn form of obligation which we have described 
as a Contract of Becord. 

The result of legal proceedings taJcen upon a broken con- 
tract may thus be summarized:-— ^ 

Effect of bringing action. — The bringing of an action 
has not of itself any effect in discharging the right to 
[*816] bring the action. Another action *may be brought 
for the same cause in another Gonrt; and though 
proceedings in such an action would be stayed, if they were 
merely vexatious, upon application to the summary jurisdic- 
tion of the Courts,* yet if action for the same cause be 
brought in an English and foreign Court, the fact that the 
defendant is being sued in the latter would not in any way 
help or affect his position in the former. 

Judgment by way of estoppel. — When the action is pur- 
sued to judgment, a judgment adverse to the plaintiff dis- 
charges the obligation by estoppel. The plaintiff cannot 
bring another action for the same cause so long as the judg- 
ment stands. The judgment may be reversed by the Court, 
in which case it may be entered in his favour, or else the 
parties may be remitted to their original positions by a rule 
being obtained for a new trial of the case.^ 

m. GoddMd ▼. 0*BrteB, 9 Q.B.D. 40; umISolL. 0.1,861. 
ft. JudleatuTB Aoli, order 61, | i. 

1 Whatever the right of action may rise out of, as a dmple contract, 
a ipeoialty, a Judgment or tort, it is merged in the judgment reooTe re d 
whioh beoomee a new contract Freeman on Judgm«nti» tea SIC 



ULiL BY BREACH. 417 

Bat it is important to bear in mind that an adverse jndg- 
menty in order to discharge the obligation by estopping the 
plaintiff from reasserting his claim, must have proceeded 
apon the merits of the case. If a man fail because he has 
3ued in a wrong character, as executor instead of adminiB- 
trator; or at a wrong time, as in the case of action brought 
before a condition of the contract had been fulfilled,* such 
as the expiration of a period of credit in the sale of goods, a 
jadgment proceeding on these grounds will not prevent him 
from succeeding in a subsequent action.^ 

By way of merger. — If the plaintiff get judgment in hit 
favour, the right of action is discharged and a new obligation 
arisen, a form of the so-called Contract of Record.* It re- 
mains to say that the obligation arising from judgment may 
be discharged by payment of the judgment debt, under 4k Ss 
5 Anne, a 16, § 12, or by satisfaction obtained by the cred- 
itor from the property of his debtor by the process of €Xdou- 

{o) Z(y>86 qf Time. 

Eseepi hy eospresa statutory prcvisiot^ lapse of time doee 
not affect the rights of parties to contracts. The rights arising 
from contract are of a permanent and indestructible 
^character, unless either from the nature of the con- [*817] 
tract, or from its terms, it be limited in point of 
duration.' 

But though the rights arising from contract are of this 
permanent character, the remedies arising from their viola^ 
lion are, by various statutory provisions, withdrawn after a 

m» PitfmerT.Templa,f A.ftK.flBL 

k pw44L 

& Par Lord Selbo^l^ Llaael^ BaHwhj On. ▼. L. A N. W. Raflwiij On. L. B. 7 H. I. 

m. 

i Wood ▼. Ftot, 55 Mich. 186 ; Britton ▼. Thornton, 112 U. & 626; Pen- 
dergrasB ▼. York Biannf . Go. 76 Me. 609 ; Maxwell ▼. dark, 189 Mass. 113 ; 
Enapp ▼. Eldridge, 88 Kan. 106; Moore t. Dunn, 41 Ohio St 69; Lord ▼. 
Wflcoz, 99 Ind. 491 ; Atkins ▼. Anderson, 68 la. 789; Paget ▼. Oakes, 64 
la. 196; Philpott ▼. Brown, 16 Neb. 887; Gage ▼. Swing, 114 DL SIS 
Bnekett t. People, 115 DL 99. 

r 



418 DISCHABOB OP OONTR^Cr. FufT 

certain lapse of time. The remedies are tMurred, though 
the rights are not extinguished. 

Simple contract. — It was enacted by 21 Jac. L a 16, § S, 
that 

^ All actions of account, and upon the case . • • and 
all actions of debt grounded upon any lending or contract 
without specialty, all actions of debt for arrearages of 
rent . • • shall be commenced and sued within • • . 
six years next after the cause of such action or suit and not 
after.'' 

It will be noted that " action upon the case** includes ac- 
tions of Assumpsit, as was explained in an earlier chapter.' 

Specialties.— The SUtute 3 & 4 Wm. IV. c. 42, § 3, lim- 
its the bringing of actions upon any contract under seal to 
a period of twenty years from the cause of action arising. 

Disabilities saspeuding operation ofStatates. — These 
Statutes begin, in the ordinary course of things, to take ef- 
fect so soon as the cause of^ action arises, but there are cer- 
tain circumstances which suspend their operation. The 
Statute of James * provided that infancy, coverture, insan- 
ity, imprisonment, or absence beyond seas should, where 
the plaintiff was affected by any of these disabilities at the 
time the cause of action arose, suspend the operation of the 
Statute until the removal of the disability. The Statute of 
William the Fourth made the .same rule apply, except in 
case of imprisonment, to actions on specialties. 

The Mercantile Law Amendment Act* provides that 
neither imprisonment of the plaintiff nor his absence be- 
yond seas shall operate as a suspensory disability in aotions 
on simple contract or specialty. 

Where the defendant is beyond seas at the time the rigtit 
of action accrues, the operation of the Statute ' is suspended 
nntil the defendant returns. 

But where there are two or more defendantSi one of 

flb p. 88. 

ft. ai Jao. L a 16, 1 7. 

A a ft 4 WaUam IV. o. 0, 1 4 ; If A » Vkl tL IT, I la 

A4ABBi.o.l«,|ia 



CbAp. m. $ 4. BY BREACH. ill 

whom *is beyond seas, the plaintiff may proceed at [*818] 
once against those who are accessible without affect- 
ing his rights * against the one who is beyond seas.^ 

A disability arising after the period of limitation has be> 
glin to mn will not affect the operation of the Statute:' nor 
will ignorance that a right of action existed. But where 
that ignorance is produced by the fraud of the defendant, 
and no reasonable diligence would have enabled the plaint- 
iff to discover that he had a cause of action, the statutory 
period commences with the discovery of the fraud.' This 
is an equitable rule,* not observed by the Common Law 
Courts before the passing of the Judicature Act but now 
adopted under s. 24, sub-s. 1 of that Act 

Bevival of right of action.— It is possible that Statutes 
of Limitation may be so framed as not merely to bar the 
remedy, but to extinguish the right: such is the case with 
regard to realty under 3 and 4 Will. IV. c. 27, but as re- 
gards contract the remedy barred by the Statutes of Lim- 
itation may be revived in certain ways. 

In case of specialty. — Where a specialty, contract re- 
sults in a money debt, the right of action may be revived 
for the statutory period of limitation, (1) by an acknowl- 
edgment of the debt in writing, signed by the party liable, 
or his agent; or (2) by part payment, or part satisfaction 

c. 19ft so Viet. 0.97. 1 11. 
k Blair ▼. Brantogr, 5 Ban, 660; Hunter ▼. Oibbona, 10 A. ft M. «•; Glbbt T. OnfllA 

• Q.aix«. 

> A reTiew of the Btatutes of the several states on limitation of actions 
woold'be oat of place in these notes, Thej differ oonsiderabij in their 
proTiflioiia, bat are all founded on the statute of James, and the sub* 
■tanoe of Lord Tenderden's Act is generally adopted. The state statutes 
on this subject will be t<Amd in Wood on limitation of Actions. 

SJackaon ▼. Johnson, 5 Cow. 74; Hogan t. Kurtz, 04 U. 8. 773; Hogg 
T. Aahmim, S8 Pa. St. 80; Bozeman ▼. Browning, 81 Ark. 864; Swear- 
iagan ▼. Robertson, 89 Wis. 4S3. 

•OMiipbeU T, Long, 90 la. 883; Sterenson ▼. Robinson* 88 Miob. 100; 
AtlMtte Bank t. Harris^ 118 Mass. 147; CommiasioiMn t. Smitl^ 88 



tdO DISCHARGE OF OONTRACT. Put ▼ 

on aoooant of any principal or interest due on snch a spe- 
oialty debt Such a payment if made by the agent of the 
party liable will have the e£Fect of reviving the claim.* 

Of simple contract — 3y promise. — Where a simple 
contract has resulted in a money debt the right of action 
may also be revived by subsequent acknowledgment or 
promise, and this rule is affected by two Statutes, Lord 
Tenterden's Act,* which requires that the acknowledgment 
or promise, to be effectual, must be in writing; and the 
Mercantile Law Amendment Act (19 & 20 Yict a 97), 
which provides that such a writing may be signed by the 

agent of the party chargeable, duly authorised 
[*819] ^thereto, and is then as effective as tiiough signed 

by the party himself. 
By aclmowledgment. — The sort of acknowledgment or 
promise which has been held to be requisite in order that a 
simple contract debt may be revived for another period of 
six years, is thus described by Mellish, L. J.:' — ^ There 
must be one of three things to take the case out of the 8tat> 
ute (of Limitation). Either there must be an acknowledg- 
ment of the debt from which a promise to pay is implied; 
or, secondly, there must be an unconditional promise to pay 
the debt; or, thirdly, there must be a conditional promise 
to pay the debt, and evidence that the condition has been 
performed.^' * 

fl.tft4WIU.IV.«L«,|l 

kf Geo. IV. 0.14. 

«. iB ro BiiFor Steomor Co. 6 Oh. ML 

1 Aeknowiedsment and psrt pajment— The Mithoiitiw on acknowl- 
edgment and part payment as affecting the statute are nnmerona, and 
though the prindples pertaining to them haTe been passed upon again 
and again by the courts of every state in the Union, still many perplex- 
ing questions regarding their application remain unsettled. It may be 
stated generaUy: 

First Many of the early cases wherein it was held that asimple aUa> 
B&oo to a debt as existing, although accompanied by an express declara- 
tion not to pay, removed the statutory bar, are whoUy inapplicable to 
the present state of the law. The statute is now regarded as a statute 
«C repose as well as a sUtute of presumption. In Jewett ▼. P^tii» 4 



Clh^III.t4. BYBBEULCH. 4S1 

This being the principle, its application in every case 
most turn on questions of construction of the words of the 
alleged promisor. And as was remarked in the most recent 
case upon the subject, ^^ When the question is, what effect 
is to be given to particular words, Uttle assistance can b|e 
derived from the effect given to other words in applying a 
principle which is admitted." * 

By part payment. — The debt, however, admits of revival 
in another mode than by express acknowledgment or prom- 
ise. A part payment, or payment on account of the prin- 
cipal, or a payment of interest upon the debt will take the 
contract out of the Statute of Limitation. And it is ex- 
pressly provided in Lord Tenterden's Act that nothing 

flb Tm deaal^t B., In Skeet t. Iiiid«7, t Sz. D. tt7. 

Mich. 609, Douglass, J., said* *' The law of limitation is almost nniTeF- 
■ally conceded to ha^e a twofold foundation; in the first place, the 
actnal probabilitj that a debt which has not been claimed for a lone 
time was paid, and that this was the reason of the silence, of the cred- 
itor; and, in the second place, the inexpediency and injustice of pei^ 
mitting a stale and neglected claim or debt, eyen if it has not been paid, 
to be set up and enforced after a long silence and acquiescence.** Parker 
T. Bntterworth, 46 N. J. L. 247. 

Second. An acknowledgment to remore the bar must be made to the 
proper person, by the proper person, and with proper formalities when 
tiiey are required by statute; and must be in terms sufficient to wai^ 
rant the inference of a promise to pay the debt. ViTood on *Lam. ol 
Actions, 12S; Abercombie ▼. Butts, 72 GhL 74; Perry t. Chesley, 77 Me. 
tS8; Holt T. Qage, 60 N. H. 686; Erebs ▼. Olmstead, 187 Mass. 604; 
Biddel t. Brissolara, 64 OaL 864; Parker t. Shufoid, 76 N. C. 810; 
Hnssey ▼. Kirkman, 06 N. a 68; Gronshore t. Knox (Pa. St.), 86 Alb^ 
L. J. 17a 

Third. Part payment in order to remove the bar must be made undcf 
such circumstances as amount to an acknowledgment of the debt It 
must appear that the payment was made on account of the debt for 
which the action was brought, and that it was made as a part payment 
of a greater debt. Tippets ▼. Heane, 1 G. M. & R. 262; Benton t. Hol- 
land, 68 Vt 688: Stote ▼. Corlies, 47 N. J. L. 108; Miner t. Lormaa. 
66 Mich. 212; Alms House Farm t. Smith, 62 Ck>nn. 484; Whitney ▼. 
Ghambm, 17 Neb. 00. 



422 mSCHABOE OF OONTRAGX FteiV. 

Chfirein contained ^ shall alter, or take away, or lessen the 
effect of any payment of any principal or interest made by 
any person." But the pay^nent most be made with refer- 
ence to the original debt, and in such a manner as to amount 
to an acknowledgment of it.* 



OHAPTEEIV. 
. i 

Impossibility of Pexfoxmanoo. 

IicpoesiBiLnT of performance arising subseqnentlj to the 
formation of the contract will, in certain cases, operate as 
a discharge. But before proceeding to consider and classify 
these cases, it may be well to say something as to Impossi- 
bility in general in its relation to contracts. 

Unreality of consideration. — Obvious physical impossi- 
bility, or legal impossibility which is apparent upon the 
face of the promise, avoids the contract, because, as we have 
seen,* the promise is an unreal consideration for any prom- 
ise given in respect of it 

Mistake. — Impossibility which arises from the non-exist- 
ence of the subject-matter of the contract avoids it, as we 
have seen, on the ground of mistake} There are however 
two cases of this sort which may safely be said to be irrec- 
oncilable, and it may be well to notice them here lest the 
student should be perplexed in the attempt to reconcile 
them. 

In RHU «. Sughrue* the defendant agreed with the 
plaintiff by charter-party to take his (the defendant's) ship 
to the island of Ichaboe and there load a complete cargo 
of gnano and return with it to England, being paid a high 
rate of freight. There was so little guano at Ichaboe that 
the performance of the defendant's promise to load a com- 
plete cargo was impossible. The plaintiff sued him for 
damages for failure to bring home a cargo, and was held to 
be entitled to recover: impossibility of Performance was 

ft. Strkddwid T. Tmar, 7 KniL 117; MM. 9c na 
«. SILftW.flBi. 



424 DISCHABOB OF CX>NTBAC!t FutT. 

held to be no answer to an abeolate promise taoh as the de- 
fendant had made. 

On the other hand, in Clifford «. WoUb^ the plaintiff and 
defendant were landlord and tenant, and the plaint- 
[*321] iff sued *upon a covenant in the lease in which the 
defendant undertook to dig from the premises not 
less than 1,000 tons of potter's clay annually, paying a 
royalty of £«. 6{2. per ton. The defendant pleaded that 
there never had been so much as 1,000 tons of clay under 
the land. The Court held that the plea furnished a good 
answer to the plaintiff's claim. "Here,** said Brett, Z^ 
'^ both parties might well have supposed that there was clay 
under the land. They agree on the aeeumption thai U i$ 
there; and the covenant ie applicable only if there he dayJ* 

The cases are practically indistinguishable. It is notice- 
able that the Judges in the Court of Common Pleas, in dis- 
tinguishing Hide V. Sughrue^ from Clifford v. WaUSy* cu- 
riously misapprehended the point of the earlier case;' and 
this makes it useless to attempt to draw fine distinctions be- 
tween the two cases. 

Subsequent impossibility no excuse. — We now come to 
deal with Impossibility arising subsequent to the Formation 
of the Contract, and we may lay it down as a general rule 
that whether or no such impossibility originates in the de- 
fault of the promisor, he will not thereby be excused from 
performance. 

We have already dealt with what are termed ^^ conditions 
subsequent/' or ^^ excepted risks," and what was then said 

a. L. R. 6 0. P. 677. 

6. 16 M. ft W. 168. 

e. L. a. 6 0. P. 677. 

d. It la dear from the lAiigiuice of WfflM, J., wX p. 686, and of Brott, J., at pu 8BQ, tfaaS 
they thought the action in HiU9 «. Sughnt/^ L. R. 6 a P., waa brought hj the ship-owner 
against the charterer for not furnishing a cargo, whereaa it waa hrooght b j the char- 
terer against the owner for not loading a cargo which the owner, oontrary to the onll> 
nary practice in charter-partiea, undertook to do (see dicta of Parke, B., 16 M. ft W. 
M8-0>. There is a great difference between a man promising to go and bring home a 
thing which proves to be non-existent, and a man promising that, if another will let 
out his ship on oertatai terms, he will enable him to earn freight bj loading a oaigo 
which, when the ship is sent, and the consideratloa so far given, prorea to be Be» 
existent. It must seem that the Court of Common Fleaa imlntantloBaUy decided asa- 
traiy to HiXU «. fitigAnML 



rr. DIFOSSIBIUTT OF PERFORMANCE. 495 

may serve to explain the rale now laid down. If the prom- 
isor make the performance of his promise ponditional upon 
its oontinaed possibility, the promisee takes the risk: in 
the event of performance becoming impossible, the 
promisee must *bear the loss. If the promisor makes [*822] 
his promise unconditionally, he takes the risk of 
being held liable even though performance should become 
impossible by circumstances beyond his control 

An old case, Paradins v. Jane^ illustrates the law upon 
this subject briefly and perspicuously.' 

The plaintiff sued for rent due upon a lease. The defend- 
ant pleaded ^^ that a certain German prince, by name Prince 
Rupert, an alien bom, enemy to the king and his kingdom, 
had invaded the realm with an hostile army of men; and 
with the same force did enter upon the defendant's posses- 
sion, and him expelled, and held out of possession . • • 
whereby he could not take the profits.^ The plea then was 

C.Al6jii,flL 

1 Paradlne r. Jane is followed in The Harriman, 9 WalL 173; Beebe 
▼. Johzuon, 19 Wend. tOO; Harrison t. Missouri Pacific R. Go. 74 Mow 
S71 Harmony ▼. Bingham, 18 N. Y. 99, and the principles of the case 
are adhered to in numerous decisions. Stees ▼. Leonard, 20 Minn. 494; 
Dermott ▼. Jones, 2 WaU. 1 ; School Trustees ▼. Bennett, 27 N. J. L. 
618; Bacon ▼. Cobb, 45 HL 47; Adams t. Nichols, 19 Pick. 275. "Impos- 
sible conditions cannot be performed ; and If a person contracts to do 
what, at the time, is absolutely impossible, the contract will not bind 
him, because no man can be obliged to perform an impossibility ; but 
where the contract is to do a thing which is possible in itself, the per- 
formance is not excused by the occurrence of an inevitable accident or 
other contingency, although it was not foreseen by the party nor was 
within his oontroL" Jones ▼. United States, 96 U. a 29. In The Har- 
riman case, supra, Swayne, J., gives a lucid explanation of the meaning 
(rf the term impossibility in this connection. 9 WalL 172. Kitsinger ▼. 
Sanborn, 70 IlL 146. This principle was applied in School District Na 1 
▼. Dauchy, 25 Conn. 580, where defendant agreed to build and complete 
a school-house for plaintiff. When nearly completed, the building was 
Btrmck by lightning and destroyed. The court held that the destmctioii 
of the building did not excuse defendant's non-performance of the cod- 



4M DISCHARGE OF OONTRAGT. Fait T. 

in snbstanoe that the rent was not dne, because the lessee 
liad been deprived by events beyond his control of the 
profits from which the rent should have come. 

Bat the Court held that this was no excuse; "and this 
difference was taken, that whers the law creates a duty or 
charge and the party is disabled to perform it without any 
default in him, and bath no remedy over, tJiere the law wiU 
excuse him. As in the case of Waste, if a house be destroyed 
by tempest, or by enemies, the lessee is excused. . . • Bat 
when a party by his awn contra^ creates a duty or charge 
upon himself^ he is bound to make it good, if he may, not 
withstanding any accident or inevitable necessity, because 
he might have provided against it by his contract. And 
therefore if the lessee covenant to repair a house, though it 
be burnt by lightning, or thrown down by enemies^ yet he 
ought to repair it." 

This being the general rule of law, we must now note 
a group of exceptions to it. And these must be distin- 
guished from eases in which the Act of Ood is said to 
excuse from non-performance of a contract; for this use 
of the term " Act of God " has been condemned by high 
authority.* 

There are, as we have seen, certain contracts into which 
the Act of God is introduced as an express, or, by 
[*323] custom, an ^implied condition subsequent absolving 
the promisor. But there are forms of impossibility 
which are said to excuse from performance because '' ti^ 
are not within the contract; " that is to say, that neither 
party can reasonably be supposed to have contemplated 
their occurrence, so that the promisor neither excepts them 
specifically, nor promises unconditionally in respect of 
thenL* 

We wiU deal with them seriatim. 

m> Fbt Curiam In Baflflj ▼. D« Ormplgajt L. B. 4 ^ B. pi fl^ 
kL.a.4Q.&lflBw 



Ghapw lY. IMPOSSIBILITY OF PERFORMANCE. 487 

(1) Legal impossibility^ arising /ram a change in the law 
of our own country ^ exonerates the promisor} 

Except where there be ehange of the law. — In Bailey 
V. De Orespigny^^ the plaintiff was lessee to the defendant 
for a term of 89 years of a plot of land: the defendant re 
tained the adjoining land, and covenanted that neither htt 
nor his assigns would, daring the term, erect any but oma 
mental buildings on a certain paddock fronting the demised 
premises. A Railway Company, acting under parliament 
ary powers, took the paddock compulsorily, and built a sta- 
tion upon it. The plaintiff sued the defendant upon the 
covenant: it was held that he was excused from the ob 
servance of his covenant by an impossibility arising fron' 
the action of the Legislature. *' The Legislature, by com 
polling him to part with his land to a railway company 
whom he could not bind by any stipulation, as he co'ild an 
assignee chosen by himself, has created anew hindof assign^ 
such as was not in the contemplation of the partus when the 
contract wae entered into. To hold the deiend^^p.t responsi- 
ble for the acts of such an assignee is to make an entirely 
new contract for the parties." 

(3) Where the continued existence (yf j specific thing is e^ 
sential to the performance of the oorJractj its deetruetian^ 
from no defavU of either party^ operates ae a discha/rge. 

Destrnetion of snbject-matter. — The leading case upon 
this subject is Taylor v. Caldwell} There the defendant 
agreed to let the plaintiff have the use of a Music Hall 
for the purpose of giving concerts upon 'certain days : [*324] 
before the days of performance arrived the Music 
EUl waa destroyed by fire, and the plaintiff sued the da- 

«.tL.&4Q.BLl80l 

iia&Aaasfl. 

1 Jones v. Judd, 4 N. T. 411; People v. Insurance Go. 91 N. Y. n4* 
Bemmes ▼. Insorance Co. 18 WalL 158; Baker ▼. Johnson, 45) K. "'.• 
ISi; The Mississippi, eta B. R. Ca v. Qreen, 9 Heisk. (TeniL) C^« 
Briok PlreSk Cauizoh t. Major, 6 Cow. 688L 



ttB DISCHABOB OF OONTRACT. PkilT 

fendant for losses arising from the consequent breach of 
contract. 

The Court held that, in the absence of any express stipu- 
lation on the matter, the parties must be taken ^to hsTe 
contemplated the continuing existence " ' of the Music Hall 
^^as the foundation of what was to be done;" and that 
therefore, ^ in the absence of any express or implied stipu- 
lation that the thing shall exist, the carUract is not to he con- 
strued as a positive contract, btU as subject to an impliedooi^ 
dition thai the parties shall he excused in case, hefore hreoAh, 
performance becomes impossible from the perishing of the 
thing without defauU of the controAStorP ^ 

It will be observed that in this case thx. Court introduces 
an ^^ implied condition " into the contract, that the subject- 
matter of it shall continue to exist; whereas in the latter 
case quoted above, express note is taken of the fact that the 
impossibility is ^not within the contract," and has not been 
made the subject of any condition ; and thisi it is submitted, 

1 Taylor v. Caldwell is frequentlj referred to in our courts as s Issd- 
ing casa Dr. Bishop, in his recent work on Contracts, § 588, says: '* If 
the contract assumes the continued existence of the thing, then <« per- 
formance becoming due, if, without the fault of the parties, the thing 
has ceased to exist, the ease has become one of mutual mistake^ and 
the duty to perform no longer remains.** To which our author would 
undoubtedly take exception, as mistake does not discharge a contract, 
but prevents its formation. The principle, however, that in every con 
tract there is an implied condition that the subject-matter d the con 
tract shaU be in exbtence at the time performance is due^ whers ite 
continued existence was contemplated by the parties, is unquestioned; 
and in Powell v. D. a & Q. R R Co. ISOrag. 489, it is said: '< In every > 
contract for the conveyance of property there is an implied condition I 
that the subject-matter of the contract shall be in existence when the I 
time for the performance of the contract arrives.** Wells v. Cslnan, 
107 Mass. 514; The Tornado, 108 U. a S4d; Qould v. Murch, 70 Me. 288; 
Thompson v. Gk>uld, 30 Pick. 184; Brumby v. Smith, 8 AUl 133; 
Walker v. Tucker, 70 Dl. 527; Lord v. Wheeler. IQray, 382; Ward ▼. 
Vance, 13 Norria <Pa.), 498; School District No. 1 v. Dauchy, 35 Conn. 
630; Dexter v. Norton, 47 K. T. 05, where Church, Ch. J., oonaidenak 
Isngth dischaqee by non-existence of the subject-matter of the contrtd 



Cbmp. lY. ^ miHDSSIBIIJTY OF PEBFOBMANCBL 429 

18 a more satisfactory inteq)retation of the rale than to in- 
trodaoe a term into the contract which was never present to 
the mind of either party to it 

(3) A oontract which haa for its object the rendering of 
peraonal services is discharged by the death or incapacitating 
illness of the promisor. 

Ineapaclty for personal serrlee. — In Bobinson v. Davi- 
son^ an action was brought for damage sustained by a 
breach of contract on the part of an eminent pianoforte 
player, who having promised to perform at a concert, was 
prevented from doing so by dangerous illness. 

The law governing the case was thus laid down by Bram- 
well, B. : — " This is a contract to perform a service which 
no deputy coold perform, and which, in case of death, could 
not be performed by the executors of the deceased; and I 
am of opinion that, by virtue of the terms of the 
original bargain, ^incapacity of body or mind in [*825] 
the performer, without default on his or her part, 
is an excuse for non-performance. Of course the parties 
might expressly contract that incapacity should not excuse, 
and thus^preclude the condition of health from being an- 
nexed to their agreement. Here they have not done so; 
and as they have been silent on that point, the contract 
mnst^ in my judgment, be taken to have been conditional 
and not al^lnte.'' ^ 

m. L.B.6ExdlLt09. 

1 Bobinson v. Daylson.— This principle has been quite liberaUj ap- 
plied bj oar oourto, and the extent to which death or dckness of the 
promisor works a discharge of his contract to render personal serTioes 
is mnstrated in Green ▼. Gilbert, 21 Wis. 401, where it is held that in 
case of a partial non-performance of such contract, by reason of sick- 
ness, a recovery for the work done can be had only on a ijuMntum met- 
tftl, and not on the contract Jennings ▼. Lyons, 89 Wis. 558 ; Wo